Mar. 31, 2014 - By BURAK EGE BEKDIL - Defense News
ANKARA — Turkish officials, increasingly wary of a controversial decision in September to select a Chinese company to construct the country’s first long-range air defense system, might consider a more time-consuming but entirely local option for the program.
A senior procurement official said he could not rule out the possibility.
“I think Aselsan has the essential capabilities for [the long-range air and anti-missile system]. This may be a challenge, but not something unattainable,” the official said.
Government-controlled military specialist Aselsan is Turkey’s biggest defense company.
But a second procurement official was more skeptical.
“A preliminary study ... says that it may take no less than 14 years for Aselsan to deliver the system,” he said. “And that’s an optimistic guess.”
An Aselsan official, speaking on condition of anonymity, admitted that his firm would be keen to set out for the job. “An altogether local solution would earn Turkey extremely strategic capabilities it may need for future programs in air defense.”
As for the risk of belated deliveries, he said: “Our development and production efforts may not come sooner than existing foreign options, but there are no guarantees any foreign option will not produce unexpected delays, either.”
Both the government and Aselsan have come under pressure from NATO allies to rethink a September decision to award the US $3.44 billion air defense contract to China Precision Machinery Import-Export Corp. (CPMIEC).
Turkey’s Western allies have said if Turkey finalizes the deal with the Chinese manufacturer, its entire defense cooperation with Western counterparts, including defense and non-defense companies, could be jeopardized.
The Chinese contender defeated a US partnership of Raytheon and Lockheed Martin, offering the Patriot air defense system; Russia’s Rosoboronexport, marketing the S-300; and the Italian-French consortium Eurosam, maker of the Aster 30.
Turkish officials said if contract negotiations with CPMIEC fail, talks would be opened with the second-place finisher, Eurosam. Next in line would be the US bidder. The Russian option was eliminated.
This year, the Turkish government asked the European and US contenders to make new bids by April 30.
The Turkish program consists of a radar system, launcher and interceptor missiles. It has been designed to counter enemy aircraft and missiles. Turkey has no long-range air defense systems.
About half of Turkey’s network-based air defense picture has been paid for by NATO. The country is part of NATO’s Air Defense Ground Environment. Without NATO’s consent, it will be impossible for Turkey to make the planned Chinese system operable with these assets, some analysts say.
But NATO and US officials have said any China-built system could not be integrated with Turkey’s joint air defense assets with NATO and the United States. They also have warned that any Turkish company that acts as a local subcontractor in the program would face serious US sanctions because CPMIEC is on a US list of companies to be sanctioned under the Iran, North Korea and Syria Nonproliferation Act.
In December, Aselsan, potentially CPMIEC’s main Turkish partner in the contract, became the first casualty of US sanctions when Bank of America Merrill Lynch, a US investment firm, pulled out of a joint bid to advise Aselsan on the company’s second listing on Istanbul’s stock exchange, citing Turkey’s contract talks with CPMIEC.
Further talks with two other international banks, Barclays and Goldman Sachs, also have failed. Another Aselsan official said the second listing was not “on hold.”
Both procurement officials said the government is interested in further assessing whether a solution based on Aselsan’s local work would be a good idea. But such a decision would come from the top government levels, and it would await political calm after elections.
Turkey’s embattled government, fighting a series of scandals over fraud and undemocratic practices in the country’s judiciary system, is facing a strong challenge from opposition parties in local elections. Observers agree the polls would be a confidence vote on Prime Minister Recep Tayyip Erdogan’s government, and that the results may force early parliamentary elections this year.
A Feb. 25 meeting of the Defense Industry Executive Committee, which is chaired by Erdogan and oversees top procurement decisions, was indefinitely put off due to political turmoil.