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ECONOMICS > Bargain on national missile set ‘warms up’

ISTANBUL - Hürriyet

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The race for Turkey’s missile tender, worth $4 billion, is warming up, with China bidding below $3 billion and thus forcing the U.S. to decrease its offer in order to stay in the competition, anonymous sources have claimed.

Despite representatives of Raytheon declining to comment on the tender process, according to the sources the U.S. firm has been working hard to rehabilitate its offer for the Patriot system.

The protracted tender process for Turkey’s national long-range missile defense system was anticipated to be finalized during the Defense Industry Executive Board’s meeting last month.

For the estimated $4 billion contract, the pan-European company Eurosam, maker of the Surface-to-Air Missile Platform/Terrain Aster 30 system, is competing with a Raytheon-Lockheed partnership marketing Patriots; Russia’s Rosoboronexport, marketing the S-300 system; and China Precision Machinery Export-Import Corp., offering its HQ-9.

However, the tender was delayed due to China’s move to haul prices down to almost half the original.

The other bidders are now striving to revise their offers.

Another possible reason for the delay is the deployment of U.S.-made Patriot missiles provided by NATO along the Syria border, which could nullify Turkey’s own program to build long-range anti-missile and air defense systems on its soil, according to industry sources.

Meanwhile, many Western officials and experts say the Russian and Chinese systems in the Turkish competition are not compatible with NATO systems. The fear is that either country’s potential victory could inadvertently provide it with access to classified NATO information, and, as a result, may compromise NATO’s procedures.

Despite this criticism, Turkey so far has resisted dropping the Chinese and Russian options.

January/31/2013

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