Daijiworld Media Network – Tallinn

Tallinn, Sep 4: Estonia’s Defence Minister Hanno Pevkur has resigned, taking political responsibility for a €70-million (over Rs 768.50 crore) ammunition procurement deal intended to support Ukraine that has become embroiled in a major procurement controversy.

Pevkur, who had served as defence minister since 2022, announced his resignation on Wednesday following critical findings by Estonia’s National Audit Office. He said he was taking political responsibility for the country’s defence sector and would hand over the portfolio to Prime Minister Kristen Michal at a suitable time.

The controversy centres on contracts signed in 2024 by Estonia’s Centre for Defence Investments (RKIK) with Datasel SRL, an Italy-registered company that had been acquired by India’s Neco Defence Munitions earlier that year. The deal was intended to secure artillery shells for Ukraine amid severe ammunition shortages.

Estonia used funds from the European Union’s European Peace Facility for the procurement. It signed its first contract with Datasel in August 2024 and paid around €15 million upfront. A second agreement was signed in October, followed by several more contracts, taking total advance payments to around €70 million by the end of the year.

The ammunition was initially expected to reach Ukraine within months, but deliveries were repeatedly delayed due to reported production problems. When ammunition was eventually received in 2025, Estonian media reported that it failed to meet quality requirements.

Datasel has disputed Estonia’s claims and challenged the termination of the contracts. The company said it supplied a significant quantity of munitions and submitted invoices worth around €58 million. It also confirmed receiving approximately €59 million in advance payments from RKIK.

The company acknowledged delays but rejected allegations that the ammunition supplied was of inadequate quality. Datasel said it remained willing to complete the contracts if RKIK fulfilled its own obligations.

RKIK terminated the contracts last autumn and demanded the return of the advance payments. Estonia has since taken the dispute to international arbitration in Strasbourg, France, seeking to recover the €70 million.

RKIK Director General Elmar Vaher said the contract should not have been signed, pointing to Datasel’s lack of previous experience in supplying artillery shells. He compared the decision to hiring a company with no experience in building houses to construct one.

Prime Minister Kristen Michal had previously said he did not consider Pevkur personally at fault, but acknowledged that political responsibility could still apply. Pevkur said he believed Estonia had made the right decisions to strengthen its national defence and highlighted the country’s increased defence spending since Russia’s full-scale invasion of Ukraine in 2022.

Estonia, a NATO and European Union member bordering Russia, has been a strong supporter of Ukraine and regards the war as a serious security concern for the Baltic region.