Turkey outlines dates in $3.5 bln attack helicopter program

[ozgurluk at xs4all.nl]

TDN, 16 May, 1998

 Turkey outlines dates in $3.5 bln attack helicopter program

  * The first-stage winner will be announced in March 1999 and Turkey
 plans to see the first helicopter in the air by Nov. 2002
  _________________________________________________________________

 Metehan Demir

Ankara - Final countdown for Turkey's $3.5 billion defense project to
produce 145 third-generation attack helicopters has started as the key
dates for the plans have been set by the country's defense industry
authorities.

The latest plan is for a short-list consisting of two or three
companies to be announced between Sept. 6-9 of this year by the
Defense Industry Executive Board, which includes the prime minister,
the chief of General Staff and the defense minister.

In September the Defense Industry Executive Board will evaluate the
short-list and send the names of the short-listed firms to the Turkish
Aerospace Industries (TAI), which will be the main contractor for the
project.

Later, after the short-listed companies meet with TAI officials during
a period expected to last between four to six months, the TAI will
prepare and submit reports to the Undersecretariat for Defense
Industries (SSM), who will evaluate them and make a final decision.

The winner of the initial contract will be announced by the Defense
Industry Executive Board in Feb. or March 1999. Turkey plans to see
the first helicopter in the air by November 2002.

Turkey's first stage in the bidding process will include 50
helicopters out of a total of 145, followed by an additional 50 and a
final 45. The tender for the first 50 helicopters is expected to
amount to around $2 billion, out of a $3.5 billion total tender.

  First tender winner seems favored for the next stages

Despite official SSM pronouncements that other tenders will be
accepted during the remaining two stages, experts say that the winner
of the contract for the first 50 helicopters will have a greater
chance for the next 95 helicopters since, after establishing costly
production lines and infrastructure, it would not be logical to set up
different production lines with another company.

Turkey began the process with the SSM's Request for Proposals (RFP) on
May 30, 1997, which had a closing deadline of Dec. 31, 1997.

  The competitors

The five official competitors are the American manufacturer Boeing's
AH-64D Apache Long Bow; American Bell Helicopter-Textron's AH-1Z King
Cobra (the manufacturer of the Super Cobra, which is currently being
used in the Turkish military); French Eurocopter's Tiger; Italian
Agusta's A129-International; and Russian Kamov's KA-50/2. The firms
submitted their proposals on the last day of 1997 in response to an
official request from the SSM.

The Boeing-Sikorsky partnership, the producer of the
reconnaissance-attack stealth helicopters RAH-66 Comanche did not
respond to the SSM's request for proposals, while the Russian
helicopter firm Rostvertol, manufacturer of the Mi-24 and Mi-28,
decided to withdraw from the tender.

Several Turkish firms, such as the military electronic company,
Aselsan, are being considered for participation in the helicopter
production project as local subcontractors.

There are currently five committees within the SSM and one in the
military which have been analyzing and evaluating the proposals. The
SSM committees, which were especially set up for the project, are as
follows: system performance specification; technology transfer;
administration; offset agreements; and finance. The military also has
a special consultation and monitoring committee.

  Not only a defense project but a trump card

Turkey does not see its helicopter program as merely a defense
industry project, but also as a political trump card to be used in
relations with the United States, France, Russia and Italy, the
countries competing for the tenders. In addition to the helicopter
project, the tank project is also one of Turkey's strongest trump
cards in its attempt to urge those countries to work in favor of
Turkey in the European Union (EU) and the international arena.

There are rumors that there will be at least one American company on
the short list, and that France's Eurocopter, as well, has a better
chance than its other European rivals. France has long supported
Turkey within the EU, and this attitude may help it in the lucrative
Turkish defense market. But the recent involvement of Israel as a
project partner of both Kamov and Agusta may change the current
balance, as Turkish-Israeli ties are developing both strategically and
militarily. Experts note that Russia and Italy have increased their
chances in the tender stakes by setting up partnerships with Israel.

Russia, however, has some disadvantages. For months, Turkey has been
urging Russia not to sell the controversial S-300 missiles to Greek
Cyprus. If that sale goes through, it will compromise Russia's future
bidding on the giant Turkish tenders. This concern will also be voiced
during the upcoming visit of Chief of General Staff Gen. Ismail Hakki
Karadayi to Russia next week.

  Warning to US firms

Turkey has strongly urged all the candidate firms, including the U.S.
producers, to provide the country with production and export licences,
as well as full transfer of technology and source codes for the
helicopters. Ankara wants to be sure that it does not face any
difficulty over the notification of the helicopter production-project
permission in the United States Congress if an American firm wins the
tender.

Meanwhile, the U.S. Congress has noted that it wants to see the
contract before it approves the production licence. Some experts say
that if the United States drags its feet on this issue, even if an
American company comes up with the winning tender, Ankara may decide
not to award them the contract.

In the long term, Turkey also plans to increase the strength of its
fleet of both assault and general purpose helicopters to 750 and to
sell helicopters to third countries, including the Turkic states.

-- 
Press Agency Ozgurluk
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