Brazil delays decision on purchase of jet fighters

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RIO DE JANEIRO, Dec. 16 (UPI) -- Brazil has postponed, at least until early spring 2010, a decision on buying jet fighters from any of the three rival bidders who were hoping to win huge orders worth tens of billions of dollars.

President Luiz Inacio Lula da Silva's decision to put off buying the warplanes as part of a major military refurbishment program is seen by analysts as part of a strategy to extract maximum advantage over Brazil's long-term plan for extensive technology transfer.

In negotiations with the bidding manufacturers -- the Boeing Co., French defense manufacturer Dassault and Sweden's Saab -- Brazil insisted on maximum technology transfer, mainly to enable the country to start producing its own prototypes, or aircraft built in close collaboration with the original manufacturer.

Boeing is offering to sell the F18 Super Hornet, and Dassault has put up the Rafale, while Saab is competing with Gripen, another high-tech rival to both Super Hornet and Rafale.

The three competing models being considered have all special features and have found markets outside their countries of manufacture. Brazilian experts have expressed interest in borrowing from the Rafale, the F18 Super Hornet and the Swedish Gripen to produce something of their own. The Gripen is a multi-role combat aircraft currently used outside Europe by the South African air force and on order from Thailand, while both Boeing and Dassault have extensive markets abroad.

So far, France has been most forthcoming in response to Brazil's request, and the negotiations were led personally by President Nicholas Sarkozy, who visited Brazil in September and signed a series of agreements with Lula for arms sales, military collaboration and joint production and research.

Neither Boeing nor Saab has made clear how far they would go in sharing their industrial secrets with Brazilian arms manufacturers.

Lula has announced plans for an extensive refurbishment of Brazil's air force. Analysts said that despite Brazil's cash reserves, the country's huge defense needs justify its quest for a domestic capacity that would supplement expensive imports from abroad. Present Brazilian plans call for the purchase of 36 fighter jets, but industry sources say Brazil can use hundreds more to cover its airspace.

Lula said Brazil would revisit the fighter aircraft acquisition plans in early 2010.

Brazil's plans for the fighter aircraft are part of a wider military acquisition program that involves purchase of tanks and armored cars abroad but local manufacturer of the bulk of Brazil's requirement. Against about 34 tanks from Germany, Brazil has set a target of producing most of a required 3,000 armored vehicles and tanks.

Likewise, when Sarkozy visited Brazil he contracted to sell Brazil four conventional submarines and help build a fifth, nuclear-powered submarine in Brazil.