Israel seeks US partner for Arrow
Israel is looking for a US partner to co-produce the Arrow anti-missile defence system as Jerusalem and Washington launch negotiations to set the guidelines on the export of the system.
Israel Aircraft Industries (IAI), the chief contractor of the Arrow, recently received approval from the Clinton administration to begin discussions with possible US partners. The next step, following a co-production agreement, would be a US government decision whether to allow the US company to take the lead in marketing the system to allies, something Israel wants. As co-production in the USA would not make economic sense if Israel remains the only customer, Washington is expected to grant permission for overseas sales.
Although IAI has exhibited the Arrow missile to prospective clients, it is banned from selling any Arrow components as the USA has financed 60% of the $2 billion joint development programme launched in 1987.
The move comes as the Israel Defence Force is preparing to deploy the first Arrow launchers at an air force base in central Israel on 15 March. Israel plans to install three Arrow batteries over the next three years to protect the country against ballistic missile attack. A second Arrow base in northern Israel is being delayed because of a legal fight waged by local residents.
Israeli officials said that after more than two years of negotiations the Clinton administration has agreed in principle to sell the Arrow to allies of the USA and Israel. They said an agreement to allow the Arrow to be marketed is due to be completed within the next few months.
IAI is negotiating co- production with Boeing, Lockheed Martin and Raytheon. All three are involved in US Department of Defense (DoD) ballistic missile defence programmes. Lockheed Martin was the lead US contractor in the early stages of the Arrow programme in the early and mid-1990s.
For both Boeing and Lockheed Martin, the Arrow would complete the range of systems being developed by the two companies. Boeing is the integrator of the National Missile Defence project and is providing the backup to the Exo-atmospheric Kill Vehicle, which underwent two tests last year.
Lockheed Martin is chief contractor for the Theatre High Altitude Area Defence system.
IAI executives said the Arrow would supply both companies with a medium-tier defence system. Boeing, Lockheed Martin and Raytheon are also involved in the Patriot Advance Capability-3 lower tier anti-tactical missile defence system.
Under the projected agreement, which has yet to be finalised, the US partner in the Arrow project would be the marketing agent and be responsible for liaison with the DoD and the Ballistic Missile Defense Organization (BMDO). The Arrow system would require 51% production in the USA to be classified as US-made.
"This will be very difficult to do," an IAI executive involved in the negotiations told Jane's Defence Weekly . "It will involve the establishment of production lines and for this there has to be economic justification."
Israeli officials said in discussions with the US government that they had not yet determined whether the Arrow missile itself would be offered for sale. They said the first stage could be Israeli technology and systems. This would include the Green Pine radar system manufactured by IAI subsidiary Elta Electronic Industries, or the Citron Tree command and control system by Tadiran Electronic Systems.
"There is no contract," an official told JDW . "We are talking about a first step. There will have to be agreements between governments as well as between companies."
IAI officials said several countries, particularly Turkey, have pressed the USA to allow the Arrow to be purchased. They added that Japan, Korea and the UK are among other interested countries.
On 1 November Israel and the USA conducted what they described as a successful test of the complete Arrow system, including the missile, radar and command and control system. Officials said more tests are planned for this year.
The US has budgeted funds for Fiscal Year 2001 (FY01) to ensure that Israel can deploy three batteries over the next few years as well as integrate the system with the US Army's Patriot system. Lt Gen Ronald Kadish of the BMDO told the House Armed Services subcommittee on military research and procurement on 16 February that the DoD has allocated $81.2 million for FY01 so Israel can procure components for a third Arrow missile battery.
US officials said the FY01 budget ensures efforts that Israel and the USA will have interoperable missile defence systems. This will allow the Arrow to be operated along with the Patriot and the US Navy's Navy Area-Wide system.
Gen Kadish said the DoD will continue to use the Israeli Test Bed and other systems developed by Israeli contractors to help deploy and upgrade the Arrow 2. He said the two nations will conduct interoperability tests over the next year to ensure that Arrow meets US and Israeli requirements.
IAI is looking to Boeing, Lockheed Martin and Raytheon to find a partner to co-produce the Arrow anti- missile defence system
©Jane's Information Group 2000
Posted:29 February 2000
Source: Jane's Defence Weekly
Also Online: Jane's Defence Weekly
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