Analysis: European defense contracts

By LEANDER SCHAERLAECKENS, UPI Correspondent  |  July 28, 2008 at 1:57 PM
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BRUSSELS, July 28 (UPI) -- Turkey awards a $4 billion submarine deal to German HDW-MFI.

Turkish Defense Minister Vecdi Gonul has announced the competition to build Turkey six submarines for about $4 billion has been won by HDW-MFI. The German company beat out Armaris from France and Navantia from Spain to clinch the coveted contract.

Had Navantia won the deal, some of the proceeds would have trickled down to the giant U.S. Lockheed Martin Corp., which would have acted as systems integrator.

The decision was made by Turkey's Defense Industry Executive Committee, which is chaired by Islamist Prime Minister Recep Tayyip Erdogan.

The contract is the latest in a string of big deals awarded by Turkey, which has been seeking to modernize and heavily upgrade its defense equipment.

The first submarine should be ready to enter service by 2014, Defense News reports.

Turkey's original plan was to upgrade its Ay-class submarines, but it has now ordered the air-independent propulsion submarines instead.

Switzerland gaining ground on arms market.

Switzerland is re-emerging as a serious player in the European defense industry. The small country best known for its neutrality throughout wars is becoming an enabler of armed conflict as its arms exports have risen 63 percent over the first six months of this year compared with that same span a year ago, according to customs officials.

That puts Swiss arms exports at roughly $340 million over the past six months. That number still trails European leaders France and Germany considerably, as both those countries sell around $3 billion worth of weapons every year, but it shows a desire to expand the Swiss market share and gain ground on industry leaders.

Of that $340 million, the biggest buyer was Denmark with $41.6 million worth of Swiss imports. The other big buyers were Germany and Belgium with $33.8 million each and Britain with $24.2 million.

Hugo Chavez goes defense shopping in Russia.

Venezuelan President Hugo Chavez, who is fond of antagonizing the United States, has been visiting Russia on what is expected to be a shopping binge for defense equipment.

Rosoboronexport, Russia's government-controlled arms-selling giant and monopoly, says it is expecting to offload some Antonov An-74 and Ilyushin Il-114 transport aircraft on Chavez, who is flush with oil cash.

Chavez is also said to be in the market for Russia's state-of-the-art Tor-M1 air defense system and a submarine. The Kremlin has already sold the Tor-M1, which is believed to be effective against U.S. subsonic Tomahawk cruise missiles, to Iran.

Other sources have said Chavez is expected to buy 20 Tor-M1s and three submarines.

Furthermore, discussions on how to proceed with already agreed plans to build a factory to produce Kalashnikov automatic rifles and an accompanying munitions plant in Venezuela by 2010 and a helicopter training center there will continue, according to the Russian online newspaper

Saudis seek to lure Russia away from Iran with arms deals.

According to several newspapers, Saudi Arabia has approached Russia with an offer of several defense contracts on the condition that Russia would curb its already close arms-sales ties with Iran.

Relations between Saudi Arabia, which is predominantly Sunni Muslim, and Iran, which is fiercely Shiite Muslim, have been tense of late, with both oil states jostling for position in the ever-fluctuating Middle Eastern political landscape. The Saudis are also very concerned about the Iranian drive to develop nuclear weapons-making capabilities.

Russia, which has been closely cooperating with Iran on arms deals and energy policy, thus has been approached by Saudi Arabia to end its close ties with Iran in return for a flurry of big arms deals, according to the Moscow business newspaper Kommersant. The deals would be for air defense systems, helicopters and tanks.

Saudi Prince Bandar bin Sultan and Russian President Dmitry Medvedev and his predecessor, current Prime Minister Vladimir Putin, met recently to discuss the offer, the reports said.

It was the second time a Saudi prince made such an advance in the name of King Abdullah bin Abdulaziz ibn Saud.

Russia is considering the proposal from Saudi Arabia, some of the reports said.

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