Monday, May 9, 2011

Poland Hopes Obama Visit Will Bring F-16 Base Deal

WARSAW - Poland is hoping that the May 27-28 visit of U.S. President Barack Obama will pave the way for the stationing of U.S. F-16 fighter jets on Polish soil for the first time, Poland's defense minister said May 9.
"I hope that both sides will be ready with this agreement by the time President Obama arrives," Bogdan Klich said, quoted by the Polish PAP news agency.
"I confirm that at the moment we are holding talks with the Americans on the topic of detailed agreements that will govern on what basis the Air Detachment - the detachment that will permanently service the F-16 and Hercules crews and land personnel periodically visiting Poland - will be stationed on our territory," Klich said.
Last year, Klich said he hoped the F-16 rotations would begin in 2013.
The United States will announce the transfer of an F-16 base from Aviano in Italy to the Lask air field in central Poland during the Obama visit, Poland's leading Gazeta Wyborcza daily reported May 9, quoting an unnamed Polish diplomatic source.
A U.S. official familiar with the negotiations May 9 in Warsaw refused to confirm or deny the information, but indicated that an agreement announced by the Polish and U.S. presidents in Washington in December was "on track".
A press statement issued Dec, 8 by the White House following talks between Obama and Polish President Bronislaw Komorowski announced the "establishment of a U.S. air detachment in Poland to support periodic rotation of U.S. military aircraft", without providing a time-frame.
In December, Poland's Soviet-era master Russia warned it against hosting U.S. fighter jets, saying it would counter the move.

Report: Israel To Invest $1 Billion In Iron Dome

JERUSALEM - Israel plans to invest $1 billion in the development and production of batteries for its Iron Dome rocket interception system, a top Israeli defense official said in an interview published Monday.
Defence Ministry director-general Major General Udi Shani told the daily Haaretz newspaper that five countries have already expressed interest in the system, which was successfully deployed during a rise in rocket fire from Gaza in early April.
But Shani, in his first interview since his appointment in January 2010, warned that the system's capacity must be put in perspective.
"We need to adjust expectations in relation to Iron Dome," he told Haaretz.
"We have [accomplished] a significant achievement in reaching operational capacity sooner than expected, but this is not a system that can ensure the interception of every rocket in every situation."
Shani said Israel would invest heavily in the system, which is developed by the Haifa-based Rafael Advanced Defence Systems, in addition to receiving US funds to boost Iron Dome's capacity.
"We are talking about [having] 10-15 Iron Dome batteries. We will invest nearly $1 billion in this. This is the goal, in addition to the $205 million that the U.S. government has authorized," he said.
Shani did not specify the length of the period over which the investment would be spread.
Israel deployed the first battery of the unique multimillion dollar system on March 27 outside the southern desert city of Beersheva, after it was hit by Grad rockets fired from Gaza.
On April 4, the system was also deployed around the southern port city of Ashkelon.
The system, the first of its kind in the world and still at the experimental stage, is not yet able to provide complete protection, but it successfully brought down a number of rockets fired from Gaza in April in what was the first time it had been used in an actual combat scenario.
Designed to intercept rockets and artillery shells fired from a range of between four and 70 kilometers, Iron Dome is part of an ambitious multilayered defense program to protect towns and cities.
Two other systems make up the program - the Arrow long-range ballistic missile defense system and the so-called David's Sling or Magic Wand system, which is intended to counter medium-range missiles.
Shani said Israel plans to invest another $1 billion in David's Sling over five years, and that the system should have its first operational capacity by 2012.

S. Korea Fortifies Shelters On Islands Near North

SEOUL - South Korea is spending millions of dollars to fortify shelters on five front-line islands near its tense sea border with North Korea in case of any future attacks, an official said Monday.
The move follows an artillery and rocket barrage by the North last November against Yeongpyeong island, which killed two marines and two civilians. The South has sent more troops and weaponry to the islands since the attack.
"We are strengthening military shelters in the northwestern border islands to guard against coastal artillery attacks from the North," a defense ministry spokesman told AFP without elaborating.
Yonhap news agency said the military had started rebuilding about 100 shelters on the five islands.
The new corrugated steel structures would produce fewer fragments when hit than existing concrete shelters, it quoted a defense ministry official as saying.
"Construction will cost about 5 to 10 billion won ($9.2 million) and will be completed by the end of June," said the official, adding that the ministry planned to rebuild other military installations with the same material.
The disputed Yellow Sea border has been a flashpoint for over a decade and was the scene of deadly naval clashes in 1999, 2002 and November 2009.
Seoul also accused Pyongyang of torpedoing a warship near the border in March 2010 and killing 46 sailors, a charge denied by the North.

India Begins War Games Along Pakistan Border

JODHPUR, India - India kicked off war games involving thousands of troops Monday along its border with arch-rival Pakistan, which is still smarting from the U.S. operation that killed Osama bin Laden.
A military spokesman told reporters the six-day exercise, codenamed Vijayee Bhava (Be Victorious) was being held in the Thar desert region in the Indian state of Rajasthan.
"This exercise envisages sustained massed mechanized maneuvers," S.D. Goswami said, adding the drill involved an array of weaponry that India has acquired as part of its ongoing military modernization program.
More than 20,000 combat troops were taking part.
The Indian army, the world's fourth largest in terms of personnel, has conducted 10 major military exercises along Pakistan's border in the past six years.
Pakistan is currently under pressure to explain how bin Laden - killed in a U.S. raid on a town near Islamabad a week ago - had managed to live in the country undetected for years.
India has already given its verdict, denouncing its South Asian neighbor as a terrorist "sanctuary" and renewing calls for Islamabad to arrest suspects behind the 2008 Mumbai attacks.
India says the 10 gunmen who attacked multiple targets in Mumbai, killing 166 people, were members of the Pakistan-based Lashkar-e-Taiba militant group.
India suspended peace talks with Pakistan after the attacks. The dialogue was recently resumed but India has continued to criticise Pakistan for not doing enough to bring the alleged organizers to justice.
The two nuclear-armed countries have fought three wars since gaining their independence in 1947.

Sunday, May 8, 2011

Tech Offers Shape India's Jet Picks

Willingness to transfer technology likely helped the multinational Eurofighter Typhoon and French Dassault Rafale emerge as the short-listed rivals for India's Medium Multi-Role Combat Aircraft (MMRCA) program, observers said, although at least one U.S. official said the Indian Air Force's technical requirements were the deciding factor.
The Indian government has not even formally announced the downselect, let alone explained why it ruled out the Swedish Saab JAS-39 Gripen, the Russian MiG-35, and two U.S.-built jets, the Boeing F/A-18E/F Super Hornet and the Lockheed Martin F-16IN Super Viper, from the $10 billion, 126-aircraft program.
Instead, the news was passed April 27 to the jet-makers' national governments, irking at least some U.S. industry players.
"The way the decision was made and announced has only made things worse: The [government of India] knew full well the importance the administration attached to this sale. A quiet intimation of the coming decision would have helped considerably. It was really unfortunate that this was not done," said Ashley Tellis, an analyst at the Carnegie Endowment for International Peace in Washington.
A Indian Defence Ministry source said the decision was based on technical evaluations and flight tests, not political considerations or influence. Defence Minister A.K. Antony insisted that the selection be based on merit alone, the source said.
A senior Defence Ministry official said India will next open negotiations over technology transfer and price with the remaining bidders, a process that could last all year.
Several analysts said that while the U.S. had allowed its jet makers to offer unprecedented access to technology, European contenders probably pledged more.
"The most likely explanation is that the Europeans wanted and needed it more. They were willing to bend over backwards in terms of technology transfer, in terms of industrial work share and in terms of other regulatory issues, and they really needed this," said Richard Aboulafia, an analyst at the Teal Group, Fairfax, Va. "For the U.S. contractors, it would have been gravy, but for the Europeans, it's survival through the end of the decade."
Byron Callan, an analyst at Capital Alpha Partners in Washington, agreed about the stakes, but also said the U.S. companies' loss augurs poorly for their chances in Brazil's fighter competition.
Others disagreed about the role of tech-transfer in the Indian decision.
Tellis said the choice merely reflected the Indian Air Force's (IAF) technical preferences.
"The down-select decision clearly represents the IAF's choice, which the MoD has obviously gone along with as expected," he said.
One senior U.S. administration official agreed.
"I wouldn't see the technology release issue as the clincher," he said. "This was a judgment made on the basis of the technical qualification requirements that the Indian Air Force had established as part of the procurement."
He said the two U.S. aircraft had failed to meet certain Indian technical criteria.
"India would have been well-served to take a more comprehensive look at the transaction," he said.
But the official also conceded there were certain technologies that the U.S. simply would not share.
"We have a defense licensing system which is consistent with the law of the land, and there are certain technologies we're simply not going to hand over. That's just a fact of life," he said.
Boeing disputed the assertion that the F/A-18E/F did not meet Indian technical requirements.
"We believe we offered the Indian Air Force a fully compliant and best-value multi-role aircraft for the defined mission," the company said in a statement.
Indeed, many analysts considered the Boeing entrant to be among the most technologically capable of the rivals, as well as offering the favored twin-engine configuration.
"The F/A-18, that surprised me," said Douglas Barrie, an analyst with the International Institute for Strategic Studies in London. "My side bet for the program would have been the Rafale, Typhoon and F/A-18E/F making it to the down-select."
One U.S. industry official noted that Indian officials had publicly asserted that viable contenders would have an operational active electronically scanned array (AESA) radar, something only the F/A-18/E/F and F-16IN possess. The European contenders are developing AESA arrays.
"Yet, it seems that the IAF and MoD made the decision based on strategic, political grounds, not technical merits," the official said.
Several analysts said India has not forgotten that the U.S. imposed sanctions on the country after a 1990s nuclear test, nor that Washington is working to bolster ties with arch-enemy Pakistan.
For the U.S. government, which has placed an enormous stake on securing a strategic partnership with India, the short-list decision comes as a bitter pill.
"We are reviewing the documents received from the Government of India and are respectful of the procurement process," U.S. Ambassador Timothy J. Roemer said. "We are, however, deeply disappointed by this news. We look forward to continuing to grow and develop our defense partnership with India."
Roemer's comments were echoed by the senior U.S. administration official, who noted that the country's relationship was far deeper than one transaction. He noted that India had purchased U.S. weapons worth billions of dollars in recent years, including C-130J and C-17 airlifters and P-8 maritime patrol aircraft.
The official said the Indian bureaucratic system does not know the American system particularly well, which undermines its confidence in the U.S. as a reliable supplier. Over time, the official said India's faith in the U.S. would grow stronger.
"The logic of the U.S.-India relationship is as compelling today as it was on Tuesday in Asia and beyond," he said. "It's not the end of the world."
Bhim Singh, an analyst and retired IAF wing commander, predicted that the rejection of Boeing and Lockheed Martin wouldn't hurt bilateral defense ties.
But Tellis said there would be repercussions.
"I think the Obama administration will be deeply disappointed with this decision - as will the Congress. I think U.S.-India defense relations have been in trouble for a while. I suspect this will make things more difficult," he said.
The Rejected
Boeing has its Navy contracts for the Super Hornet and EA-18G Growler and other orders coming in from Saudi Arabia for the F-15, while Lockheed is shifting its focus onto the gargantuan F-35 Lightning II stealth fighter project.
But Saab needed the Gripen to win the Indian competition to remain in production; the aircraft has few other prospects beyond Brazil.
"They're dead in the water," Aboulafia said.
For the Russians, the MiG-35 loss to the Western contenders is was not entirely unexpected, Barrie said. The aircraft is based on the aging MiG-29 airframe.
Still, the Russians have a huge backlog of Indian contracts, including a deal to co-develop a new fifth-generation stealth fighter, and they acknowledge India's desire to diversify its supplier base. United Aircraft Corp.'s "cooperation with India is the widest of all countries and we understand that Indians do not want to keep all eggs in one basket and try to diversify suppliers," said an official from the Russian company.
Ruslan Pukhov, an analyst with the Center for Analysis of Strategies and Technologies in Moscow, agreed that the rejection of the MiG-35 in the MMRCA tender will not affect other projects.
"While Russia and India had bitterly quarreled over the cost of refitting of the Admiral Gorshkov aircraft carrier, it has not upset any other project," he said.
The Russians said the MiG met all of India's technical criteria.
Lockheed Martin and Saab acknowledged the Indian decision in written statements, while Boeing said, "We are obviously disappointed with this outcome. Our next step is to request and receive a debrief from the Indian Air Force."

A First for Russia's Booming Industry

MOSCOW - Russian Helicopters will become the first Russian government-controlled industrial holding producing military hardware to go public, aiming to raise $500 million in an initial public offering on London and Moscow exchanges.
"The offering is expected to consist of the sale of the existing shares primarily by the company's major shareholder, Oboronprom, as well as up to $250 million of primary shares in the form of Global Depositary Receipts," the company said in a statement April 12.
One GDR represents one ordinary share.
"The company currently plans to use net proceeds ... to pay off existing debts and to fund certain mandatory tender offers for shares in its subsidiaries," the company said.
Russian Helicopters, which claims to be the No. 1 global producer of attack helicopters and the world's leader in producing medium and heavy-lift rotorcraft, was created by the government in 2007 to bring the country's helicopter-makers into a single vertically integrated holding.
It is 100 percent controlled by Oboronprom, another government-controlled holding, that controls the country's engine-makers.
The company holds majority stakes in every Russian major helicopter-maker, including Mil (72.38 percent), Kamov (99.79 percent), Ulan-Ude Aviation Plant (75.09 percent), Kazan Helicopter Plant (65.9 percent) and several others.
The consolidation of the helicopter-makers was completed in December, when Russian Helicopters announced that it had boosted its share in the Rostvertol, Rostov-on-Don-based plant, from 22.76 percent to 75.06 percent.
Russian Helicopters plans to announce the placement price on May 11, and the main trading session will start May 16.
Bank of America Merrill Lynch, BNP Paribas and VTB Capital, an investment arm of the Russian government-controlled VTB bank, have been appointed as joint global coordinator and book runners.
VTB Capital has valued Russian Helicopters at $2.5 billion to $3 billion ahead of the initial public offering in Moscow and London, Russian official news agency RIA Novosti reported April 14. BoA Merrill Lynch has reported the company value is $2.2 billion to $3.2 billion.
Officials at Oboronprom and Russian Helicopters declined to comment on the initial public offering on the record, citing its sensitivity.
"We are already the undisputed leader in some of the most attractive and fastest growing markets in the global helicopter industry. Our IPO comes at a time when we enter into a new cycle of long-term growth, with strong demand and firm orders from our existing customers, and increasing opportunities to win new customers in new markets around the world," Dmitry Petrov, CEO of the Russian Helicopters, said in an April statement.
Market Potential
Helicopter-making is the booming industry in Russia, with strong export prospects and promising domestic orders, both state and commercial ones.
"Last year, we even created a special department to trade in helicopters," said Vyacheslav Davidenko, spokesman for Rosoboronexport, the official arms exports agency. "The global demand for the Russian helicopters is growing."
Latin America, India and Southeast Asia remain the biggest buyers of Russian helicopters, Davidenko said.
In 2009, 30 percent of the 183 helicopters rolled out by the company were sold to foreign militaries, half of the total was domestic and foreign commercial civilian orders, and the remaining 20 percent was procured by government agencies, including the Defense Ministry.
The company was 69 in the Defense News Top 100 ranking in 2009, with the total revenue of $1.82 billion, revenue from defense of $813.8 million, and profit of $173 million.
In 2010, the holding produced 214 helicopters, Russian Helicopters said.
The company has not yet disclosed its 2010 financial results, but its website said that the company accounted for about 85 percent of helicopter sales in Russia and the former Soviet Union, and 13.5 percent of worldwide helicopter sales in U.S. dollar terms.
Yuri Slusar, head of the aviation industry department at the Russian Industry and Trade Ministry, said April 27 that output of the Russian helicopter-making industry grew by 2.5 times between 2003 and 2007, while revenues grew 2.1 times between 2006 and 2010.
"This is the leading sector, they are profitable, having total revenue of some $2.5 billion, they have a profit margin of 10-12 percent," he told journalists in Moscow.
He added that in the past decade, Russia was the world's third biggest producer of the military helicopters, while it ranked seventh in the 1990s.
Under the 2011-20 state arms procurement program, the Defense Ministry and the security agencies plan to buy 1,000 helicopters of different models and types.
Deputy Defense Minister Vladimir Popovkin told journalists that $29 billion will be spent on helicopters under the program through 2020. More than 100 choppers are to be delivered to the Russian military in 2011, he added.
In an April 15 statement, company officials said that it had signed a dealership treaty with the Brazilian Qualy Group Brasil for delivery of 150 light Mi-34S1 helos.
According to an industry source, Russian Helicopters is now loaded with orders for 2011, 2012 and most of 2013
"Russia's recovering economy props the demand for helicopters by the big Russian companies, like Gazprom, that operate in remote and hardly accessible areas," said Roman Kirillov, the spokesman for the Russian Helicopters, said.
According to a company statement, its order portfolio by the end of 2010 counted 351 choppers, 20 percent of them being commercial and the rest being military; 204 helicopters have been ordered to be delivered in 2011.
Konstantin Makiyenko, a researcher with the Center for Analysis of Strategies and Technologies, a think tank here, said the outstanding design of the flagship among the Russian Helicopters, Mi-17 and its modifications, are the key driver behind the development of the Russian helicopter industry.
RUSSIAN HELICOPTERS
Founded: 2007.
DN Top 100 rank: 69.
2009 revenue: $1.8 billion total; $813.8 million from defense.
General director: Dmitry Petrov.
Employees: 38,177 as of 2009.
Average salary: $700 per month.

Libyan Rebels Say Italy Will Provide Weapons

BENGHAZI, Libya - Libya's rebel government said May 7 that Italy has agreed to supply it with weapons to fight against Moammar Gadhafi, but government sources in Rome said only "self-defense material" would be sent.
"They will supply us with arms and we will receive them very soon," Abdul Hafiz Ghoga, the vice chairman of the National Transitional Council, told reporters in the rebel capital Benghazi.
Ghoga said military officers from the rebel council had travelled to Italy, Libya's former colonial ruler, and reached an agreement with officials there for the supply of arms.
He gave no details on what weapons would be supplied.
If the arms supply goes ahead, that would make Italy the first European nation to provide weapons to the badly-armed and poorly-trained rebel force that has led the fight against Gadhafi since the uprising began in mid-February.
Foreign ministry sources in Rome said that Italy has agreed to send "self-defense material" to the rebels following agreements last month within the framework of UN Security Council resolution 1973.
They said these would not be assault weapons but gave no further details.
Italian Foreign Minister Franco Frattini said last month during a visit to Rome by NTC chairman Mahmud Jibril that Italy was thinking of sending "night-vision equipment, radars and technology to block communications."
Italy, France and Britain have each sent a small number of military advisors to Benghazi to help organize the ragtag rebel force.
Rome last month said it wanted the international community to consider arming the rebels under UN Resolution 1973, which authorized the use of all means to defend civilians.
U.S. Secretary of State Hillary Clinton and British Prime Minister David Cameron have both said they believe U.N. resolutions on Libya allow arming the rebels.
But other nations in the NATO alliance that is enforcing a no-fly zone over Libya and bombing Gadhafi's military have opposed arming the rebels.
Belgium came out against the idea and Germany has insisted there could be "no military solution" in Libya.
China and Russia, which hold permanent seats on the United Nations Security Council, have argued that NATO's bombing campaign may already be stretching the U.N. mandate.
The head of the rebel council said last month that "friends" had already supplied the insurgents with arms, without saying which countries had done so or what weapons they had provided.
Russia had been a traditional supplier for Libya since Soviet times but the lifting of a previous European Union arms embargo in 2004 opened up a new market to European contractors, who rushed into the oil-rich North African state.
The most vocal backer of lifting the embargo was Italy, which quickly became one of the top European arms suppliers to the Gadhafi regime before the uprising began in February.
France, Malta, Germany, Britain and Portugal also secured lucrative arms contracts with Tripoli.