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Conflict Studies Research Centre
Middle East Series 05/43
Cooperation in the Israeli-Turkish Defence Industry
Eugene Kogan
Key Points
Middle East Series 05/43
Cooperation in the Israeli-Turkish Defence Industry
Eugene Kogan
Key Points
The balance of cooperation between Turkish and Israeli defence industries over the last nine years does not fall on the side of Turkey. The Turkish defence industry has not yet accomplished what it set out to do when it signed the defence industry cooperation agreement with Israel on 28 November 1996, namely to be self-sufficient. Capabilities have not yet improved in spite of expectations that the transfer of technology from Israel would provide it with the necessary know-how. Technology transfer alone has not been sufficient to improve the standard substantially. At the same time, the Turkish industrial market provided Israeli companies with a workload and very important income.
However, the Israeli defence industry needs to listen to the complaints of its Turkish counterpart, otherwise it may lose further contracts in Turkey. The cooperation has been and still is that between a junior and a senior partner. Undoubtedly, the management of the Turkish defence industry and the Undersecretariat for Defence Industries will strive to change this into cooperation between equals. However, this may take longer than is presently anticipated.
Cooperation in the military field has proved to be of a high quality, without ambiguities and with a very clear purpose. This has been and still is the driving force. In addition, cooperation included both countries' Western ally, the United States, demonstrating their determination to achieve not just interoperability in naval and air exercises, but also a better dialogue on strategic issues. Bilateral trade provides a necessary cushion and, as a result, brings a necessary balance. The increase in bilateral trade, from $US 18 million in 1987 to $US 2 billion in 2004, underscores its importance and further potential. The future of cooperation also appears secure because of the potential dangers from Syria and Iran to Israel, and Iran to Turkey.
Aircraft upgrade
For instance, Shaul Mofaz, Israeli Minister of Defence pledged to oversee an Elbit Systems Limited contract covering photo-reconnaissance systems for the Turkish Air Force after Elbit failed to meet the supply date. Elbit is under threat of losing a $US 35 million contract to sell its long-range Oblique Photography System to the Turkish Air Force. The company encountered difficulties in developing the system’s realtime communications capability. the F-4 upgrade programme, discussed below, did prove to be a success.
F-4 Phantom: Defense News noted that the Israel Aircraft Industries (IAI) Limited programme that angered Turkish procurement authorities was the $US 700 million programme that was launched in the late 1990s to upgrade 54 F-4 Phantom fighters for the Turkish Air Force. Turkish procurement officials have alleged excessive pricing of spare parts by IAI, however they have been satisfied with the F-4 upgrade programme as such. This point has been supported by Vecdi Gonul, who expressed satisfaction with IAI’s upgrade of 54 F-4s to the Phantom 2020.
C-130E: Jane’s Defence Weekly reported in 2002 that Turkey and IAI had been
negotiating a contract covering the avionics upgrade of seven C-130E transport aircraft in service with the Turkish Air Force Command (TAFC). The programme was worth $US7.8 million at the time. Local defence industry sources said that IAI would have to provide additional funding if an agreement is signed, since the project could be accomplished for the new price,9 which had not been specified.
Turkey’s procurement office, the Undersecretariat for Defence Industries (also known as Savunma Sanayii Mustesarligi (SSM) in Turkish, had decided in early April 2003 to end contract negotiations with IAI due to persistent differences over pricing and technical issues. In addition, in April 2003 the Undersecretariat ordered IAI’s bid bond for the contract to be cashed in. The Ankara-based defence analyst said that this was the first time that the Undersecretariat had moved to cash in a contender’s bid bond in the whole history of Turkish defence procurement. He also added that `It reflects growing unease in Ankara about Israeli bidders´.
A Turkish official said that although the contract was small in amount, it had strategic importance. Another official clarified the importance of the contract by saying that the contract could have paved the way for other similar contracts. One senior Turkish military official further added that, `We are seriously concerned and disappointed over the way the Israeli defence companies are doing business in Turkey … The situation is quite grim. There is a rapid erosion of trust which had taken years to build up.´ F-4 Phantom (new batch): As a result, the Turkish Air Force wants the next batch of F-4s to be upgraded in a joint programme with IAI.
IAI would provide the technology and perform the systems integration work at the 1st Air Supply and Maintenance Centre in Eskisehir, located northwest of Ankara.
Helicopters upgrade
Israel Military Industries (IMI) Ltd has won a $US110 million tender to equip Turkish Armed Forces’ helicopters with electronic warfare systems. It appears that Turkey has awarded IMI a follow-up $US57 million contract to equip its military helicopters with chaff-flare dispensers. However, this time IMI will be a subcontractor to Aselsan, which will integrate the dispensers on S-70 Blackhawk: Elbit Systems said it has received a $US14 million contract from Turkish Aerospace Industries (TAI) for the upgrade of the Sikorsky S-70 Blackhawk helicopters of the Turkish Armed Forces Command. The programme will be implemented in two phases over 46.5 months, beginning with a 30-month development phase.
Unmanned Aerial Vehicles subcontracting work
According to industry sources, the Turkish aerospace subsidiary, Tusas, will be the Turkish partner of Elbit Systems and Israel Aircraft Industries, splitting some 75% of the deal to purchase a network of Israeli UAVs and ground stations. Defense News further expanded on the issue of the UAVs' procurement and cited an SSM official who said that Turkey’s local industry would provide sub-systems and services amounting to 30% [and not 75%] of the contract. The Turkish `Yes´ to the Israeli consortium for the UAV deal has caused suspicion from US industry sources.
Tank upgrade M-60 Industrial aspects
In April 2001, due to an economic crisis, Turkey froze plans to purchase a new tank. In early December 2001 Turkey cancelled negotiations with Israel to upgrade its 170 US-built M-60 tanks. The reason given was the large gap between the Turkish and Israeli pricing of the deal. According to Turkish officials, `We asked the Israelis to decrease the price from $US700 million to $US550 million if they wanted the deal. However, our offer was rejected.
´ The officials further added that The Turkish participation in the project was valued at about $US 75 million. This suggestion was also found unacceptable. As a result, we cancelled the deal with Israel.´
However, Turkey decided to resume talks with Israel on upgrading the tank.
High level Turkish sources said that Turkey attaches a lot of importance to Israel as a good friend . An additional source also added that, `We believe a middle way will be found´. Between mid-January and early March 2002 Turkey put out a new tender for the M-60 upgrade. According to Internet sources, IMI won the contract, worth $US 700 million. As part of the deal, the company agreed to set up a production line in Turkey and to transfer technology for the manufacture of some of the components to Turkish companies. (For the issue of technology transfer. However, Israel rejected Turkey’s demand that this include the procedures for manufacturing the armour.
IMI committed $US 100 million to setting up a production line for the tank project in Turkey. The tanks will be upgraded in a Turkish Army Repair and Maintenance Facility in the central Anatolian town of Kayseri; subcontracted Turkish companies Aselsan and Machines and Chemical Industry Corporation (also known as Makina Ve Kimya Endustrisi Kurumu (MKEK) AS in Turkish) will provide local input under IMI's leadership. Officials in Tel Aviv and Ankara said that the upgrade programme would give Turkey the ability to mass produce the tank and key systems and components, many of which were developed for Israel’s latest Merkava-4 main battle tank. After the initial cost of setting up an assembly line at Kayseri, the unit price for the improvements, currently about $US 4 million per platform, would decrease.
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http://www.da.mod.uk/DesktopModules...=0&moduleid=2116&articleid=444&documentid=539
http://www.da.mod.uk/Publications/c...toral-adopting-a-comprehensive-approach-12751
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