Czechs talk to General Dynamics over scrapped deal

...billion contract to buy armoured personnel carriers for the Czech army.

The Czech ministry said its representatives met officials from General Dynamic's unit Steyr Daimler Puch on Thursday for the first time since the Czech cabinet decided last week to pull out of one of the largest deals in the army's history.

"Both sides exchanged their positions and agreed they will continue in negotiations in the nearest future," the ministry said in a statement without giving any further details.

Steyr offered up to 234 Pandur carriers for 23.6 billion crowns ($1.3 billion).

Czech newspapers have speculated that the government might want to force Steyr to agree to supply fewer vehicles, which Prime Minister Mirek Topolanek has said the army needs anyway.

When announcing the cancellation of the deal on Tuesday, Defence Minister Vlasta Parkanova said the supplier failed to meet the contract terms. Ministry officials said the Steyr consortium faced sanctions which they declined to specify.

Steyr beat Finland's Patria in the tender, which was called by a previous centre-left government and which was signed only after that government lost a general election last year.

Topolanek's right-wing Civic Democrats, who won the election and lead the current government, at the time criticised the centre-left administration for making such a big decision after the polls. (Reporting Marek Petrus; Editing by Quentin Bryar) ($1=17.89 Czech Crown)

Keywords: GENERALDYNAMICS CZECH/

[PRAGUE/Reuters/Finance.cz]