UPDATE 1-Czech govt scraps $1.3 bln army contract -minister

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The Czech Republic has scrapped a contract to buy armoured personnel carriers from a unit of General Dynamics Corp for an equivalent of $1.3 billion, the government said on Tuesday.

The Pandur carriers should have been supplied by the Steyr-Daimler-Puch Spezialfahrzeug consortium, a unit of U.S.-based General Dynamics.

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

Defence Minister Vlasta Parkanova said the supplier failed to meet the contract terms. Ministry officials said the consortium faced sanctions which they declined to specify.

"From the supplier's side, the contract terms were not being fulfilled orderly and timely," Parkanova told a news conference. "In our view ... the contract was violated in a significant manner," she added.

Parkanova added the ruling centre-right coalition government agreed unanimously to pull out of the agreement at a secret meeting last week, whose results were announced on Tuesday.

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

Prime Minister Mirek 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 by Petra Vodstrcilova; Writing by Marek Petrus; Editing by David Holmes) ($1=17.74 Czech Crown)

Keywords: GENERALDYNAMICS CZECH/

[PRAGUE/Reuters/Finance.cz]