The German budget committee on Thursday approved the deal with a consortium consisting of Rheinmetall, Diehl and Hensoldt despite a five-fold price hike criticised by the federal court of auditors, several participants told Reuters.
Short-range air defence systems are meant to protect troops on the tactical level, for example during deployment operations or while they are on the move, against missile and drone attacks as well as low-flying aircraft.
The companies' main task will be to develop an air defence system for short ranges starting from three kilometres and very short ranges below that where the threat is posed mainly by small drones.
The very short-range system is likely to be based on Rheinmetall's Skyranger 30, a 30mm canon mounted on the Boxer APC, with the vehicles still to be procured. Targets beyond three kilometres are meant to be tackled by Diehl's IRIS-T SLS system.
In the past, Germany had mainly relied on the Gepard anti-aircraft tank for very short-range air defence of up to three kilometres, a weapon that since has become famous in the war in Ukraine. Berlin retired its Gepards in 2010 to save money.
The companies' second job will be to enable the linking-up of this system with Diehl's IRIS-T SLM medium-range air defences which Berlin has already ordered, to build a broader, multi-layered protective umbrella.
Hensoldt will supply the radars for the system which is expected to be ready from 2026 or 2027.
($1 = 0.9208 euros)
(Reporting by Holger Hansen and Sabine Siebold; Editing by Hugh Lawson)
