ROME — Italy will pick industrial partners to start work on a major new €5 billion (U.S. $5.4 billion) tracked fighting vehicle program within “a few months,” a senior Italian Army official has told Defense News.

Companies will be invited to launch feasibility studies for the program, which is expected to lead to a 1,000-vehicle purchase as Italy hurries to replace its aging Dardo vehicles, and as the war in Ukraine has put land combat back on the map.

Furthermore, with Italy determined to involve European firms, the program could prove a catalyst for industrial integration in the sector, as soon as Rome can decide who to pick from potential partners like Italy’s Leonardo and Iveco, French-German firm KNDS, and Germany’s Rheinmetall.

“From a programmatic point of view, all documents related to the operational requirement have been approved and the Ministry of Defence has allocated an important part of the necessary budget,” said Maj. Gen. Francesco Olla, the head of the Army’s General Planning Financial Division. “Therefore, the procurement activities will begin in next few months.”

Formerly called the Armored Infantry Combat System and now renamed the Army Armored Combat System, or A2CS, the program foresees a vehicle able to share targets with other platforms; use a wide range of ammunition, including airburst rounds; and tackle threats from improvised explosive devices, anti-tank missiles and swarming drones.

The Army also envisages a vehicle with scalable armor, an open architecture, a hefty command-and-control capability, and the ability to work with unmanned aerial and ground vehicles.

Italy’s 2023 defense budget mapped out spending of €5.2 billion on the program over 14 years, but projected the budget would eventually rise to €15 billion. The document also claimed the program would be run in a “multinational context, based on alliances with solid European firms that already work with Italian companies.”

Olla said that’s because no single European nation can currently afford to develop its own vehicle.

“I do not see any [European Union] country capable of developing such a complex technological program alone because of the associated costs and requested technological know-how. Therefore, we expect to see multinational cooperation in this regard, and I am sure that the recent agreement signed by Leonardo and KNDS is a very encouraging step toward that direction,” he said.

In December, Leonardo and KNDS signed what the companies called a “strategic alliance.” The pact is meant to bring Italy on board the European battle tank program known as the Main Ground Combat System and guide talks regarding workshare on new Leopard tanks Italy is ordering from KNDS.

The deal also mentions a possible partnership on the A2CS program, according to a source with knowledge of the deal, who spoke on the condition of anonymity because he was not authorized to talk to the media.

Meanwhile, a KNDS spokesman said the “Italian vehicle could be a program for possible cooperation between Italian industry and KNDS.”

KNDS may consider offering Italy the tracked version of its Boxer vehicle, which it has tested and showed off at the 2022 Eurosatory defense show in France; the platform is not in production.

Olla said he is wary of Italy buying an existing vehicle, adding he would like to see Italian industry take the role of design authority.

“It is not only a matter of investments and jobs obtained in our homeland, but also an operational problem if you think of the logistics of the systems and the required development and upgrades they will bring with them,” he said.

“It does not mean that Italy will be self-sufficient, but we need to recover our industrial capabilities to produce high-quality platforms, which represent the best tool we can put in the hand of our warriors to give them the higher probability to accomplish their mission and get back home safe,” he added.

Rheinmetall, which is offering Italy its tracked Lynx vehicle, said it is ready to hand over design authority.

“The Lynx is the most modern infantry fighting vehicle available today. It has open architecture, and because we control the product we can give Italy technology transfer and the design authority,” said Alessandro Ercolani, the CEO of the firm’s Italian subsidiary, Rheinmetall Italia.

Ercolani said Italy would risk delaying the program if it tries developing a vehicle from scratch.

“Italy would need five to seven years to design a new IFV or tank, something it has not done since the 1990s, and there would be the cost of development to consider,” he said.

Asked if Rheinmetall is at a disadvantage since Leonardo already signed a strategic deal with KNDS, Ercolani replied: “We are not at a disadvantage because KNDS does not have an IFV to offer at this time.”

The need for more European cooperation on big-ticket programs has been stressed repeatedly by Leonardo CEO Roberto Cingolani, and A2CS could be a prime catalyst at a moment when the European main battle tank is mired in delay.

But if Italy wants a multinational alliance to work on the A2CS program, officials in Rome may have to be patient while the pieces of that alliance fit together.

A source familiar with the program told Defense News that the nascent effort was parked with procurement officials who are waiting to see what industrial consortium might evolve to handle a feasibility study.

Leonardo, which is likely involved, not only signed its cooperation deal with KNDS in December but also has a well-established joint venture to build military vehicles with Italy’s Iveco. That Iveco-Oto Melara consortium is known as CIO.

“One possibility would be for the work on the study to be handed to CIO, but officials are waiting for a signal from industry about evolving alliances that will want to handle the work,” according to the source, who declined to be named for this article because he was not allowed to speak on the record.

Leonardo has reportedly mulled the purchase of Iveco Defence Vehicles — the branch of Iveco with which it runs CIO — in order to bulk up its land operations business ahead of potential European consolidation in the industry.

“Leonardo needs to decide what to do on that front,” the source said. Ultimately, he added, if Italy wants a new vehicle, it will need to accept longer development times.

“That is why this consortium needs to come together fast,” he added.

Tom Kington is the Italy correspondent for Defense News.

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