VALPARAISO, Chile, Dec. 1 (UPI) -- Chile is boosting defense expenditure to strengthen its naval defenses against potential threats from drug crime and other contraband activity affecting its maritime frontiers.
The Chilean award of a new contract for BAE Systems followed measures by other neighboring countries to increase military spending to counter criminal gangs in the region.
BAE Systems said that following a new contract it would work to enhance Chilean naval capability.
A two-year extended agreement with Chilean shipbuilding and repair organization ASMAR would provide support to the country's Type 22 and Type 23 frigates, BAE Systems said.
The agreement comes on the back of an initial three-year contract the company signed in 2007. The new deal guarantees a core level of repair and maintenance support to the frigates, with the scope to provide additional platform and combat systems equipment upgrade work to the Armada de Chile as required.
The agreement also seeks to transfer technology and skills, enabling ASMAR to progressively increase the proportion of work it conducts independently in Chile, BAE Systems said.
Chile has been a late-comer to a recent rise in large-scale Latin American defense procurement. It was distracted in 2008 by the economic downturn and earlier this year by a magnitude 8.8 earthquake Feb. 27 that depleted the country's cash surplus.
Speaking at Exponaval, South America's leading maritime exhibition, Dean McCumiskey, BAE Systems' managing director for Europe and the Americas, said, "Today's announcement is an endorsement of the support we have delivered to ASMAR and the Chilean Navy to date and we look forward to strengthening this relationship over the next two years."
He said, "We will work side by side with ASMAR to enhance its capability to deliver complex warship support and assist in the re-equipment of its workshops at Talcahuano dockyard."
He said the company also planned to provide training for Chilean personnel in Britain. The training will enable Asmar to develop further skills required to undertake complex supply chain management, dockyard management and fleet maintenance programs, McCumiskey said.
The contract with ASMAR is part of a recent trend toward growth in BAE Systems' support and services operations. Several other examples of such deals have moved into advanced maintenance and manufacturing.
In the Middle East, BAE Systems has established a joint venture with Abu Dhabi Ship Building to provide repair, maintenance and integrated logistic support to navies and commercial organizations in that region.
BAE Systems is a global defense, security and aerospace company and employs about 107,000 people worldwide. The company reported sales of $36.2 billion in 2009.