Turkish decision on China defense deal could take 6 months

Reuters News
Posted: Nov 14, 2013 6:25 AM
Turkish decision on China defense deal could take 6 months

By Nick Tattersall and Can Sezer

ISTANBUL (Reuters) - Turkey aims to make an definitive decision in about six months on whether to co-produce an air and missile defense system with a Chinese firm that is under U.S. sanctions, a senior Turkish defense official said on Thursday.

Turkey's NATO allies voiced concern when it said in September it had chosen China's FD-2000 missile defense system over rival offers from Franco/Italian Eurosam SAMP/T and U.S.-listed Raytheon Co. It said China offered the most competitive terms and would allow co-production in Turkey.

The deal would mark a breakthrough for China in its bid to become a supplier of advanced weapons. But the Turkish official, Murad Bayar, said it was not a foregone conclusion that Ankara would end up signing the $3.4 billion deal with the China Precision Machinery Import and Export Corp (CPMIEC).

"Our procurement process is such that we begin with the first company with the intention to sign the contract but of course if there are difficulties that are not foreseen ... we go down through the rank," Bayar, Turkey's Undersecretary for Defence Industries, said at a NATO industry forum.

He said typically such contract negotiations would take six to 12 months but that the complexity of the current deal made him hesitant to be any more precise.

"The immediate goal for us is in about six months to come to a reasonable level in our contract negotiations (with China) and to understand whether it is possible to implement this program with the first option."


U.S. and NATO officials are unhappy with Turkey's choice of CPMIEC, which is under U.S. sanctions for selling items to Iran, Syria or North Korea that are banned under U.S. laws to curb the proliferation of weapons of mass destruction.

Asked if the alliance was leaning on Ankara, NATO Deputy Secretary-General Alexander Vershbow said: "It is not correct to speak of pressure. It is up to each nation to decide what military capabilities they want to acquire."

But he told a joint news conference with Bayar that it was a fundamental NATO principle that the weapons systems of allies must be compatible. "I feel very confident ... the Turkish authorities are very much aware of this."

Turkey's defense minister said last week that bidders in the air and missile defense system tender had been asked to extend the validity of their bids, indicating that Ankara is keeping its options open.

Raytheon Co and Lockheed Martin Corp are considering ways to sweeten their offer to build their Patriot missile defense system for Turkey, sources familiar with the issue said on Tuesday.

Bayar said Turkey's top priority was meeting both national and alliance military operational requirements, noting that he expected the system to be operational for at least 30 years.

"Then we move to things like industrial participation, technology transfer issues, and obviously as the last major item the cost of acquisition of this system," he said.

(Editing by Mark Trevelyan)