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IAI loses $1.5b South Korea AWACS tender

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  • IAI loses $1.5b South Korea AWACS tender

    http://www.globes.co.il/serveen/glob...119485&fid=942

    IAI loses $1.5b South Korea AWACS tender
    IAI unit Elta Systems was disqualified because it lacked US export licenses for key systems.
    Ron Paz 3 Aug 06 17:27
    Israel Aircraft Industries Ltd. (IAI) and its Elta Systems Group subsidiary have suffered a heavy blow.
    The South Korean Ministry of Defense has disqualified Elta’s proposal to supply four AWACS plans, worth $1.5 billion. The decision leaves Boeing (NYSE:BA) as the sole proposal in the tender, and brings to an end the year-long prestigious head-to-head confrontation.

    The decision was taken during a meeting of the South Korean Defense Acquisition Program Administration (DAPA) supreme decision-making, chaired by Minister of Defense Yoon Kwang-ung. The discussions have been dogged by heavy lobbying by the parties in the tender, who hired lobbyists and invested heavily in efforts to win the tender.

    A DAPA spokesman said the official selection would be announced in September, but Elta’s disqualification leaves Boeing the winner. The spokesman said Elta had a number of opportunities to submit export licenses from US for key items, but failed to do so.

    Boeing reportedly is asking $1.7 billion for supplying four AWACS planes based on the Boeing 737.

    Elta was offering an AWACS system on the Gulfstream 550 executive jet platform. Elta’s main advantage was in its price, which was substantially less than Boeing’s offer. Elta also had the support of the South Korean government and President Roh Moo Hyun, who has been trying for several years to reduce South Korea’s dependence on US defense products. On the other hand, the US has strong political influence over its South Korean ally, and 37,000 US troops are stationed there.

    The US export licenses, the lack of which were the cause of Elta’s disqualification, were essential for parts of the AWACS system developed in cooperation with the US government.
    These systems included data links for automatic exchange with other aircraft and satellite communications (satcom) ground stations.

    The South Korean media has depicted Israel in poor light in the war in the north and Lebanon, and public opinion did not help Elta in the AWACS tender.

    Elta declined to comment on the report
    To sit down with these men and deal with them as the representatives of an enlightened and civilized people is to deride ones own dignity and to invite the disaster of their treachery - General Matthew Ridgway
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