Contracts with the two suppliers are worth €10 million and follow news earlier this week that the state had paid to an Indian defense firm the bulk of €70 million for artillery shells destined for Ukraine but which have not been received.

The scandal also prompted the resignation of Hanno Pevkur (Reform) as defense minister on Wednesday evening.

"There are two companies involving a little over €10 million in total. I would leave the names for the Center for Defense Investments (RKIK) to deal with for now. They also provided information today suggesting that perhaps the issues can still be resolved," Pevkur told "Aktuaalne kaamera" on Thursday.

RKIK director general Elmar Vaher said an attempted resolution with the two firms had been unsuccessful, and the RKIK was preparing to take the companies to court, as it has done with the Indian firm, Datasel.

Vaher, who has been head of the RKIK since January, said the issues with the three companies have prompted a number of changes to RKIK processes.

"In my assessment, the RKIK as an institution and as a system simply was not prepared for a rise in the defense budget on this scale. One of my tasks over these seven months has been to build a team capable of handling this capacity and conducting the procurements. We have streamlined the decision-making chain, clarifying who decides what and when, so that not every decision ends up on the director general's desk, because that is simply not manageable for one person," Vaher, a former police chief, said.

Once a new defense minister is appointed, they, too, will have to make changes, Prime Minister Kristen Michal (Reform) said, including reporting to the government together with the RKIK chief on a monthly basis.

"A full inventory of the defense sector was added today to the defense ministry's plans. This will give us an overview of what stocks and assets are located where, whether they need to be reviewed, how long they remain usable, and so on. In addition, the RKIK's new director general, Elmar Vaher, will review all of its contracts and what obligations they may create for the state. From now on, the defense minister and the commander of the Defense Forces will also come to us every month to provide an overview," Prime Minister Kristen Michal (Reform) said.

The Riigikogu's Anti-Corruption Select Committee also discussed the issue on Thursday.

MP Anastassia Kovalenko-Kõlvart (Center), who chairs the committee, said the ministry and RKIK have not taken the matter seriously enough so far. "I get the impression that risk assessment in general, the reporting of risks and the entire set of procedures are not fully understood and have not really been thought through. Another problem is that we constantly see changes in management, particularly at the Center for Defense Investments, and as a result we also see responsibility becoming diluted," Kovalenko-Kõlvart said.

Datasel has been taken to a domestic court and the case is with the  European Court of Arbitration in Strasbourg. €59 million of the total €70 million has been paid to Datasel by Estonia, leading to questions about the whereabouts of the missing €11 million and the delivery of the shells themselves.

Pevkur announced his resignation to ETV on Wednesday evening, saying he took political responsibility for the incident but had been unaware of what had been going on up to now.

The Center Party says it is initiating a motion of no confidence in Michal as prime minister in the wake of the controversy, adding responsibility for it should stretch beyond just the defense minister and ministry.

--

Follow ERR News on Facebook and Twitter and never miss an update!