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BUSINESS > South Korea awaits discount for helicopter program

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The Turkish-Italian partnership should drop its overall price and raise the offsets in order to have a say South Korea’s helicopter tender, a source says

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AgustaWestland produces the T-129’s mainly for the Turkish Army.

AgustaWestland produces the T-129’s mainly for the Turkish Army.

Ümit Enginsoy Ümit Enginsoy uenginsoy@aol.com

Turkey should reduce prices and raise offsets in the sale of T-129 attack helicopters in order to remain competitive against two very strong American producers in a bid to win South Korea’s planed purchase the aircraft, a foreign analyst said over the weekend.

A partnership between Turkish Aerospace Industries and Italy’s AgustaWestland produces the T-129’s mainly for the Turkish Army, based on the Italian company’s A-129 Mangusta International. In addition to the Turkish-Italian partnership, both the American aerospace company Boeing, which manufactures the AH-64 Apache, and the American Bell Helicopter Textron, which makes the AH-1Z of the Cobra family, were shortlisted in May by the South Korean government. All three choppers were deemed useful during South Korea’s initial tests over the summer.

South Korea was expected to announce its decision in October, but the approaching Dec. 19 presidential elections are due to delay the result until well after the vote. A total of seven candidates have registered for the December presidential election in South Korea, however the election will still remain largely a race between Park Geun-hye from the ruling New Frontier Party and Moon Jae-in from the opposition Democratic United Party. Park Geun-hye, a familiar figure to South Koreans, is the daughter of former president Park Chung-hee.

“That the South Korean Army prefers the Apaches in the contest is an open secret,” said the foreign analyst, who is familiar with the attack helicopter program aiming to purchase around 50 gunships for billions of dollars.

“So the delay is in Turkey’s benefit. The military in South Korea is not the only procurement authority, and the Turkish-Italian partnership should drop its overall price and raise the offsets in order to have a say in the contest,” he said. Offsets in the defense industry are purchasing guarantees by the selling side to sweeten a deal with additional, unrelated defense sales.

Nuclear plant bid

“And in another open secret, if South Korea wins the second Turkish nuclear power plant, it would also be great for the attack helicopters,” the analyst said.

Energy Minister Taner Yıldız said last week that China is leading the nuclear contest for the plant in Sinop, Turkey’s north, as it is not seeking Treasury guarantees. South Korea, Japan and Canada are also bidding for the $20 billion Turkish deal, which is to be decided before the end of the year.

South Korea is expected to use the attack helicopters mainly against the small and fast North Korean patrol boats operating in the Yellow Sea, to the west of the two countries.

Turkey and South Korea have had close political ties since the Korean War of the 1950s, when Turkey was part of United Nations forces fighting North Korea and China. The two countries have recently solidified defense ties as well.

December/11/2012

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Eric Martin

12/19/2012 2:09:34 AM

I doubt we get this contract. Korea is in USA's sphere of influence. This is why you need to build a superior product.

ilker avni

12/11/2012 5:29:12 PM

The Korean President presented the Turkish brigade with Citation for they outstanding braveary during the Korean war.The Turkish Brigade allso received a similar Citation from the United states of America. The Turkish brigade (Code name North Star)was commanded by General Simal Yildiz or Kotup Yildiz.After defeating an army three times its size at the battle of Kunuci and Kumyangiang Ni Jan25-26.Pres H.Truman signed a distinguished unit Citation on July 1951.

Turk Uzan

12/11/2012 8:05:29 AM

We should lower our prices as far as they can be lowered, S-Korea is a "Perfect" military technology and development partner. I hope to see a "lot" of defense projects with our S-Korean friends.
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