Equation
Lieutenant General
They meant by the end of April, which is coming up pretty soon. But I think the announcement might be made in mid May though.
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China won Turkey's missile defense competition
- Thread starter Hendrik_2000
- Start date
They meant by the end of April, which is coming up pretty soon. But I think the announcement might be made in mid May though.
Equation
Lieutenant General
It may be true or may not be, but we have to wait and see.
A Chinese firm has not met all the conditions set in a tender to build a missile defence system for Turkey, officials in Ankara said on condition of anonymity.
Turkey, which had provisionally awarded the US$3.4 billion contract to a Chinese firm, may begin seeking other offers, the officials noted.
Chinese analysts said Turkey's reasons for backing out of the deal for China's FD-2000 missile defence system were "not convincing". The analysts described Ankara's move as "predictable" and the "result of pressure" from the US and Nato.
Feng Zhongping , director of European studies at the China Institute of Contemporary International Relations, said the assertion about failing to meet tender conditions was "ridiculous."
"As a member of the Nato alliance, Turkey should have the common sense to know its defence system doesn't match [the] Chinese FD-2000 missile system," said Feng. "I think [the] real reason behind Turkey's decision to pull out of the deal … is the great pressure from its Nato allies, with Washington paying close attention to Chinese military technology."
Nato voiced concern when Ankara said in September it had chosen China's HQ-9, or FD-2000 air-defence system, from China Precision Machinery Import-Export Corp over the Patriot system from the US firm Raytheon and rival systems from Russia's Rosoboronexport and Italian-French consortium Eurosam.
At the time of the tender, officials said China offered the most competitive terms and allowed for co-production in Turkey.
Feng implied that the Russian system was also being pushed out of the tender as a result of geopolitics, in particular Nato's position towards Russia in Ukraine. Russia's Rosoboronexport revised its offer, but it remains higher than the others and unlikely to win approval.
Beijing-based military expert Xu Guanyu said it was possible Ankara would choose the US Patriot system by default, as both China and Russia had been effectively sidelined.
"Turkey was using China as a bargaining chip to force the US firm to compromise," said Xu, noting that the resulting deal might see Raytheon lower its price and adjust its technology.
On April 30, Ankara extended the bidding for two months. Bids from Eurosam and Raytheon were due to expire on April 30, according to the Turkish Hurriyet Daily News.
In March, Murad Bayar, a top Turkish defence official, was sacked. Bayar played a key role in negotiations to buy Turkey's first long-range anti-missile system from the Chinese firm.
ANKARA — The Turkish government and the country’s largest defense company are under increasing pressure from Turkey’s NATO allies to rethink a September decision to award a $3.44 billion air defense contract to a Chinese bidder.
Procurement officials have privately admitted that if Turkey finalizes the deal with the Chinese manufacturer, its entire defense cooperation effort with Western counterparts, including defense and non-defense companies, could be jeopardized.
“I think there is growing concern in Ankara over that deal,” one official familiar with the program said. “These concerns will definitely play a role in final decision-making, although they alone cannot be a reason to change course.”
Specifically, officials with Turkish company Aselsan are concerned that its connection to the deal could harm its corporate relations with Western banks.
In September, Turkey selected China Precision Machinery Import-Export Corp. (CPMIEC) to construct the country’s first long-range air and anti-missile defense system. The Turkish government said it opted for the Chinese solution based mainly on deliberations over price and technology transfer.
The Chinese contender defeated a US partnership of Raytheon and Lockheed Martin, offering the Patriot air defense system; Russia’s Rosoboronexport, marketing the S-300; and Italian-French consortium Eurosam, maker of the Aster 30.
Turkish officials said if contract negotiations with CPMIEC fail, talks would be opened with the second-place finisher, Eurosam. Next in line would be the US bidder. The Russian option has been eliminated.
But NATO and US officials have said any Chinese-built system could not be integrated with Turkey’s joint air defense assets with NATO and the United States.
They also have warned that any Turkish company that may act as local subcontractor in the program would face serious US sanctions because CPMIEC is on a US list of companies to be sanctioned under the Iran, North Korea and Syria Nonproliferation Act.
US diplomats have said Turkish companies working on US products or technology could be subject to intense scrutiny, or requested to adopt stringent security measures to erect a wall between US technology-related activities and CPMIEC.
They said the sanctions would be imposed on any company or individual cooperating with the blacklisted companies, especially when the use of US technology is in question.
In December, Aselsan, potentially CPMIEC’s main Turkish partner in the contract, became the first casualty of the US sanctions. Bank of America Merrill Lynch, a US investment bank, pulled out of a joint bid to advise Aselsan on its second listing on Istanbul’s stock exchange, citing Turkey’s contract negotiations with CPMIEC.
Aselsan’s management shrugged it off and said it would select another bank for the task.
But the procurement official said that Aselsan’s concern over corporate repercussions has increased.
“I think they now view the deal potentially punishing for the company,” he said.
One Aselsan official admitted that after Merrill Lynch’s pullout, the company has been in talks for the underwriting with two more international banks, Barclays and Goldman Sachs. Both have echoed the same concerns, pointing to possible US sanctions.
“The press reports over difficulties with these two banks are correct,” one Aselsan official confirmed on condition of anonymity. “Other investment banks do not look promising. We may wait for a better timing for the listing.”
The difficulties over a Chinese air and anti-missile defense architecture for NATO member Turkey also were discussed during French President François Hollande’s recent visit here.
French Defense Minister Jean-Yves Le Drian, who accompanied Hollande during the Jan. 27 visit, met with Murad Bayar, Turkey’s top defense procurement official.
“Inevitably, the program was discussed at the top level, with the French raising concerns and urging the Turkish government to rethink the deal,” one senior government official said.
Similarly, the same official said, the Americans are voicing their concerns on an almost daily basis through various channels.
He said he could not comment on how the diplomatic offensive is influencing the government’s decision.
The Turkish government has extended an end-of-January deadline for the US and European competitors to rebid for the contract.
The Turkish program consists of radar, launcher and interceptor missiles to counter enemy aircraft and missiles. Turkey has no long-range air defense system.
About half of Turkey’s network-based air defense picture has been paid for by NATO. The country is part of NATO’s Air Defense Ground Environment.
Without NATO’s consent, it will be impossible for Turkey to make the planned Chinese system operable with these assets, some analysts said.
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Equation
Lieutenant General
Another deadline came and went at the end of April without a decision in Turkey’s drawn out effort to purchase a surface-to-air missile (SAM) with anti-missile capabilities. The Turkish Ministry of Defense announced its intention to purchase the Chinese HQ-9 system in September 2013. However, the bidding deadline has subsequently been extended three times, with the latest extension through the end of June allowing time to consider revised bids from Eurosam and the Raytheon/Lockheed Martin consortium.
The bid from the China Precision Machinery Import and Export Corporation (CPMIEC) appeared to meet all the criteria in Turkey’s tender. It came in $600 million under the asking price of $4 billion and the Chinese company offered co-production of the HQ-9, an important consideration for a Turkish government that aspires to develop its domestic defense industry. The HQ-9 system also reportedly tested well, exhibiting a capability to engage cruise missiles on a par with that of the Raytheon/Lockheed Martin Patriot system, and potentially a longer range for conventional air targets than the Patriot and Eurosam Aster 30 systems. Chinese media sources also reported that although the HQ-9 system has a shorter range than the Russian system, it has a faster response time (15 seconds) and it hit all nine of its targets in trials. Turkey felt confident that it could finalize the deal in six months (another deadline that passed in April) and was encouraged that the Chinese company offered the shortest timeline for delivery of the system. What went wrong?
The United States and other NATO countries expressed deep concern about the deal, raising questions about the security implications of CPMIEC system’s integration into NATO’s command and control network and the implications of Chinese technical knowledge about how U.S. and NATO air and missile defenses operate. U.S. and NATO leaders such as U.S. Secretary of State John Kerry and French Defense Minister Jean-Yves Le Drian have pressured Turkish leaders to change their minds. U.S. lawmakers also wrote a provision into the National Defense Authorization Act (NDAA) stating that no U.S. funds could be used to integrate Chinese missile defense systems into U.S. or NATO systems, a condition explicitly meant to encourage Turkey to backtrack from its decision to work with the Chinese.
Faced with higher than anticipated costs and under pressure from NATO and the United States, the Turkish government reopened bidding for the project several times. Successive extensions of the bidding deadline to January, then April, and now June 2014 have allowed time for U.S. and French-Italian companies to revise and resubmit their bids. Prospects for the HQ-9 dimmed further when Murad Bayar, undersecretary for the defense industry and the main proponent of the deal with China, was removed from his post within the Turkish Defense Ministry on March 27 and reassigned within the government.
If CPMIEC somehow perseveres and wins the contract, it would be a major success for the Chinese defense industry. This deal would mark China’s largest-ever military export sale and the first significant arms contract with a European country. Chinese arms exports have expanded significantly in recent years, with a 212 percent increase from 2009-2013 over 2004-2008. A completed deal could signal China’s ability to make significant inroads in the European and Middle Eastern arms sales markets.
Even if CPMIEC ultimately loses the deal, its success in the initial bidding highlights the progress China has made in missile and electronics capability. This was the first time that China demonstrated its ability to domestically develop and produce a long-range SAM and missile defense system with a quality comparable to that of the world leaders in defense technology. Airbus CEO Tom Enders expressed concern at China’s growing indigenous design and production capabilities, citing this near-deal and the development of advanced unmanned vehicles as evidence of China becoming “a serious competitor.”
Turkey appears unlikely to consummate the deal with CPMIEC, though it is unclear which Western company Turkey will ultimately choose. Raytheon/Lockheed Martin have offered to meet Turkey’s technology transfer requirement, but that would raise the price even further over Turkey’s $4 billion budget.
The drawn out process shows that China faces significant political and security barriers to entry into the European market from the United States and other NATO countries. This will be a significant obstacle for the Chinese defense industry going forward, especially in efforts to sell weapons to U.S. allies and close partners. On the other hand, CPMIEC’s success in winning the initial tender with an appealing combination of price, performance and technology transfer highlights the Chinese defense industry’s potential to compete with U.S. and European suppliers for third country markets where Western countries are less well placed to play the security card.
it just shows that unless China can develop weapon systems that are comparable to Western ones across the board, it's unlikely that countries like Turkey can really pick Chinese ones for any of the major competitions.
Being competitive isn't enough. IF China wants to win over traditional western markets who are aligned with US and NATO, then China will have to offer products that greatly exceed competing western products.
Of course, such an expectation is completely unrealistic.
With Turkey, if the deal falls through it is because of geopolitics rather than the quality of the product offered. Even if China offered something far better than patriot, aster, and S-400, Turkey might still have ended up backpeddling due to political pressure from NATO and the US.
Of course, such an expectation is completely unrealistic.
With Turkey, if the deal falls through it is because of geopolitics rather than the quality of the product offered. Even if China offered something far better than patriot, aster, and S-400, Turkey might still have ended up backpeddling due to political pressure from NATO and the US.
I give China high-five for going toe-to-toe with the best of what the West and Russia can offer, for such a hi-tech weapon system, in such a high-profile and strategic arm deal, from a NATO country. And essentially won the deal.
China was not expected to close the deal, for obvious reasons. This would not be the last such major arm deal that China competes for, I'm sure.
To actually win and close a deal like this, having an equivalent or even somewhat better weapon system offering is not enough. The entire geopolitical landscape would have to be more or less leveled. That would take decades, if not longer.
China was not expected to close the deal, for obvious reasons. This would not be the last such major arm deal that China competes for, I'm sure.
To actually win and close a deal like this, having an equivalent or even somewhat better weapon system offering is not enough. The entire geopolitical landscape would have to be more or less leveled. That would take decades, if not longer.
Being competitive isn't enough. IF China wants to win over traditional western markets who are aligned with US and NATO, then China will have to offer products that greatly exceed competing western products.
Of course, such an expectation is completely unrealistic.
With Turkey, if the deal falls through it is because of geopolitics rather than the quality of the product offered. Even if China offered something far better than patriot, aster, and S-400, Turkey might still have ended up backpeddling due to political pressure from NATO and the US.
TerraN_EmpirE
Tyrant King
The Deal is off.
Turkey Distancing Itself From Chinese Air Defense System
Sep. 6, 2014 - 04:24PM | By BURAK EGE BEKDIL |
FILED UNDER
World News
Europe
ANKARA — Senior government officials and procurement authorities here have distanced themselves in recent days from a disputed air defense deal with a Chinese company under US sanctions.
A senior official from the prime minister’s office said that as technical negotiations with China Precision Machinery Import-Export Corp. (CPMIEC) have been dragged into several problematic areas, “this option now looks much less attractive than it did last year.
“We are weighing the merits and demerits of other options,” the official said. “There remain scores of unanswered points about the Chinese solution.”
In September 2013, Turkey announced CPMIEC would construct the country’s first long-range air and anti-missile defense system for US $3.44 billion.
The Chinese contender defeated a US partnership of Raytheon and Lockheed Martin, offering the Patriot air defense system; Russia’s Rosoboronexport, marketing the S-300; and Italian-French consortium Eurosam, maker of the Aster 30.
Turkish officials said if contract negotiations with CPMIEC fail, talks would be opened with the second-place finisher, Eurosam. Next in line would be the US bidder. The Russian option has been eliminated.
For a fifth time, Turkey has extended the deadline for all three bidders. Most recently Turkey’s procurement agency, the Undersecretariat for Defense Industries (SSM), said Aug. 26 that the deadline would be pushed from Aug. 31 to Dec. 31.
SSM said that it was natural that its assessment of the bids was taking a long time “due to the very complex nature of the program.”
A procurement official said the future of the air defense contract would be debated at the next meeting of the Defense Industry Executive Committee, which oversees major procurement decisions. The committee has not said when its next meeting would take place, but procurement officials say a fall meeting is likely.
The committee will be chaired, for the first time, by Prime Minister Ahmet Davutoglu, who took over in August from Recep Tayyip Erdogan, who was elected president. Its other members are Defense Minister Ismet Yilmaz, Chief of General Staff Army Gen. Necdet Ozel and SSM’s head, Ismail Demir.
“This is a big program that will require governmental deliberations in addition to technical and financial assessments. Even if we may be heading for a decision to start negotiations with the second-comer [Eurosam], this will have to be decided by the prime minister,” the procurement official said.
Industry sources say top procurement officials already have been talking “unofficially” with Eurosam, which can be an indication of formalizing these talks.
“There have been several meetings in the last couple of months [between Turkish and Eurosam officials],” one source familiar with the competition said. “I think the Europeans have quite advanced their position.”
The Turkish procurement official declined to confirm these talks. Eurosam declined comment.
The Turkish government has come under increased pressure from its NATO allies to rethink the decision to work with CPMIEC in the missile defense program.
This year, Turkey’s western allies have stepped up pressure, warning that if Turkey finalized the deal with the Chinese manufacturer, its entire defense cooperation with western counterparts, including defense and non-defense companies, could be jeopardized.
The Turkish program consists of radar, launcher and interceptor missiles. It has been designed to counter enemy aircraft and missiles. Turkey has no long-range air defense systems.
About half of Turkey’s network-based air defense picture has been paid for by NATO. The country is part of NATO’s Air Defense Ground Environment. Without NATO’s consent, it will be impossible for Turkey to make the planned Chinese system operable with these assets, some analysts say.
NATO and US officials have said any Chinese-built system could not be integrated with Turkey’s joint air defense assets with NATO and the United States. They also have warned that any Turkish company that acts as local sub-contractor in the program would face serious US sanctions because CPMIEC has been sanctioned under the Iran, North Korea and Syria Nonproliferation Act. ■
Pierre Tran in Paris contributed to this report.
Equation
Lieutenant General
Actually not yet. Turkey has decided to wait till the end of this year to decide.
ANKARA — The Defense Industry Undersecretariat announced that the tender process for the Long-Range Missile Defense System Project, one of the biggest projects of the defense industry, which Chinese, American and Italian-French companies have entered, has been postponed for the third time to Dec. 31. According to information compiled by an Anadolu Agency (AA) correspondent, the project carried out in order to ensure air defense at low/middle/high altitudes and at long-ranges, was initiated with the decision of Defense Industry Executive Board (SSİK) chaired by Prime Minister RecepTayyip Eroğan.
Within the scope of the tender the U.S. was competing with its Patriot missile system, China with its FD-2000 and the Italian-French company with its Samp-T system, and it was decided that negotiations will commence with CPMIEC from the People's Republic of China. Turkey's decision to start negotiations with the Chinese firm was not very welcomed by NATO, the U.S. and Europe. Turkey was facing unprecedented pressure from NATO and the U.S. to back away from the deal with state-run Chinese firm CPMIEC. NATO and the U.S. disapproved of the deal for two reasons. The first one was that the Chinese company is on a U.S. government sanction list - for its violations of the Iran, North Korea and Syria Non-proliferation Act. The second reason, as stated by NATO allies, is that the Chinese system is incompatible with NATO systems.
While progress was made with the Chinese firm in terms of technology transfer when compared to other firms, according to sources close to the Defense Industry Undersecretariat, Turkey used this progress to trump in negotiations with the two other western firms. According to information leaked to the press recently, a discount of $300 million (TL 650.38 million) and more technology transfer was requested from the French-Italian joint venture. Again the sources noted that it is most likely that a western firm will win the tender.
According to the instructions of SSİK, if no deal could be reached with CPMIEC then negotiations with EUROSAM consortium would start and if again no deal can be reached then negotiations with the American firm would be initiated. The patriot system launchers can host 16 missiles and have a high hit level. The aerial defense radars of the patriot system can detect enemy missiles at 100 kilometers and after locking on will destroy the target within 15 to 20 seconds. The range of patriots is 70 kilometers. The system also offers an effective defense mechanism against ballistic missiles carrying weapons of mass destruction.
The long-range air defense missile of China, the FD-2000, has upright launching capacity and is deployed with batteries of two and six. The Italian-French Samp-T System can carry eight missiles in one launcher and all missiles can be fired within 10 seconds after locking on. The Defense Industry Undersecretariat requested that all offers remain valid until Dec. 31, 2014. In this respect, it was noted that the air defense system to be acquired is a complex mechanism formed of various systems and sub-systems. The Undersecratriat also said, "Various research and investigations need to take place in order to achieve our strategic plan in areas such as infrastructure to be established, common production areas, technology transfer and industrial participation. Our undersecretariat is busy working on these matters. Therefore, in order to prevent further delays, we kindly request all parties wanting to remain in the process to keep their current offers valid until Dec. 31, 2014.
Blackstone
Brigadier
At the end of the day, Turkey probably wouldn't go with CCP system because NATO is adamantly against it, and will throw the kitchen sink to prevent it.