Israel to pay penalty for delayed aircraft delivery

Two Israeli companies that have failed to deliver military aircraft to Turkey after a two-year delay will pay a penalty, the head of a Turkish defense company said Tuesday.

One Turkish defense source said the Israeli side is expected to pay between $10 million and $15 million to retain the contract, which called for the Israeli companies to provide 10 unmanned Heron aircraft to the Turkish military.

Muharrem Dörtkaşlı, director-general of the Turkish Aerospace Industry, or TAİ, said he believed the agreement would be formally announced within a few days.

His remarks indicated an amicable solution had been found to the dispute between Turkey and Israel, whose close political relationship greatly deteriorated in 2009 because of Israel’s deadly war in the Gaza Strip.

An Israeli partnership of Israel Aerospace Industries, or IAI, and Elbit won a nearly $190 million contract to produce the planes for the Turkish military in 2005. The program has been dogged from the start by technical difficulties and was delayed again this year because the Herons failed to pass a number of performance tests.

Turkish Defense Minister Vecdi Gönül warned in late November that the contract might be canceled altogether unless Israel successfully delivered the systems within 50 days, a period that was set to expire in early January.

Accord expected

Dörtkaşlı, however, told a news conference Tuesday that the various parties, including the Turkish defense-procurement office, the Israeli partnership and his company, have recently reached a “certain point of reconciliation.”

Although most of the job is being done by the IAI-Elbit partnership, TAİ is the Heron program’s prime contractor. Dörtkaşlı said he believed the accord would be formally announced within a few days, and that the final acceptance tests for the Herons could then begin. “We expect to deliver the systems in the first and the second quarters of next year,” he said.

Regarding compensation for the delays, Dörtkaşlı said: “We will pay a just amount to the Turkish state. We will share this with the Israeli side.”

He added that the penalty share for IAI and Elbit would be directly proportional to their work share in the whole program.

“The Israeli side will pay between $10 million and $15 million, and they have agreed to this,” said one Turkish defense source familiar with the program. “The TAİ’s share will be much less.”

The source said the Israelis were expected to pay their share of the penalty in the form of services and equipment, rather than money.

The Israeli partnership also includes Aselsan, a Turkish electronics company. Israeli officials had earlier blamed Aselsan for the delay, citing the “incompatibility of some of its components with the rest of the system.”

Worsening ties

Turkey and Israel boosted their political, military and defense relations to a strategic level in the late 1990s, including the sale to the Turkish military of Israeli arms systems worth billions of dollars.

This relationship, however, was greatly damaged early this year when Ankara accused Israel of major atrocities during a military offensive in Gaza in January. Prime Minister Recep Tayyip Erdoğan repeatedly and strongly criticized Israel throughout the year, despite U.S. efforts to reconcile the two sides.

Last week, Turkish President Abdullah Gül and his Israeli counterpart Shimon Peres met in Copenhagen on the sidelines of a U.N. climate summit and “agreed to return to normal relations,” in the first high-level meeting between the two allies since Erdoğan’s January spat with Peres.

Israeli Defense Minister Ehud Barak is expected to visit Ankara in January for talks with his Turkish counterpart Gönül. The visit is expected to be one of the strongest efforts yet to promote rapprochement between Turkey and Israel since relations soured earlier this year.