Estonian defence firms sought a €700 million drone shield deal without a public tender

A consortium of Estonian companies led by the software and consultancy firm Nortal tried to obtain a government contract worth about €700 million to build a nationwide counter-drone defence system, according to an investigation by the business daily Äripäev published on 4 November. The companies asked for an exemption from normal procurement procedures, but Estonia's defence ministry refused, concluding that such a deal would conflict with public procurement law. The matter is significant for a country that borders Russia and is sharply increasing military spending while building up its domestic defence industry.

What the consortium proposed

The proposed agreement would have run for seven years, with state spending of around €100 million a year. Members included Nortal, telecommunications company Telia Eesti, defence technology firms Defsecintel Solutions and Rantelon, and Frankenburg Technologies, which is developing missile production. Äripäev reported that a draft press release and a detailed communications strategy had already been prepared.

Political connections

Nortal's owner, Priit Alamäe, is a longtime friend of Foreign Minister Margus Tsahkna. Alamäe was a founder and major backer of the Estonia 200 party, which Tsahkna leads, before leaving it in autumn 2024. According to the newspaper, Tsahkna sharply criticised the defence ministry at a January government security cabinet meeting for lacking a comprehensive counter-drone strategy, and less than two weeks later the ministry received the consortium's proposal. Tsahkna denied discussing the proposal with consortium members and called the allegations political spin.

Ministry resistance

Then defence minister Hanno Pevkur said it was hard to determine what the consortium would deliver in return for the money. Kaimo Kuusk, the ministry's secretary-general at the time, described pressure at the highest political level. The interior ministry also declined to bypass tenders, saying its roughly €20 million in EU funding had to be allocated through public procurement.

Consortium leader Siim Saliste said the €700 million was an early estimate, not a final price. The consortium, reportedly now 19 companies, has not dropped the proposal. Current defence minister Martin Herem, who previously advised Frankenburg, confirmed he attended one consortium meeting and prepared a threat assessment.