By Avascent Analytics team
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A quick look at the biggest stories of the week
Pakistan • Saudi Arabia • Taiwan • Belgium • Space
On October 7, Pakistan’s outgoing naval chief confirmed that Pakistan signed a contract for two frigates from China. Neither the type of frigate nor the financial value of the contract was disclosed. The new vessels will add to Pakistan’s existing fleet of 10 frigates, and will be the fifth and sixth Chinese frigate to enter service. Currently, four F-22P Zulfiquar-class frigates serve as the mainstay of Pakistan’s surface combat fleet, which were acquired in 2005 in a deal worth $750 million. The announcement reflects the growing influence of China in Pakistan’s defense market. Avascent estimates that Pakistan will spend $24 billion on procurement over the next decade, a third of which is expected to be awarded to Chinese firms.
On October 5, during meetings in Moscow, Saudi Arabia signed a memorandum of understanding (MOU) to purchase S-400 air defense systems for an estimated $2 billion. Despite the signing, it is possible that this was more of a political move to enhance broader cooperation and not a confirmed intention to purchase the S-400 in the near term. Following the MOU, the US State Department also approved the possible sale of multiple Terminal High Altitude Area Defense (THAAD) systems to Saudi Arabia with an estimated cost of up to $15 billion. Saudi Arabia is undoubtedly concerned about Iran’s increasingly advanced ballistic missile systems. Additional worries likely stem from Iran’s MOU with China in 2015 to use the BeiDou Satellite Navigation System, and Iranian efforts to develop satellite navigation technology. Avascent Analytics believes that a THAAD sale will not cost the full $15 billion cited, and may be closer to $4.5 billion, with another $166 million for interceptors. If the earlier purchase of PAC-3 is used as a guide, Saudi Arabia could spend more on interceptors in future transactions, possibly more than double an initial buy of interceptors.
On October 6, indigenous sources reported that Taiwan is no longer looking to acquire surplus M1 Abrams tanks from the US and will now pursue upgrades to their current fleet of M60A3 main battle tanks. Upgrades to the M60A3s include replacing the main gun with a 120mm version, upgrading the ballistics computer system, and replacing the turret hydraulics. The country’s Ministry of National Defence awarded a $6.5 million contract to the National Chung-Shan Institute of Science and Technology (NCSIST) to work on researching and developing the upgrades. Taiwan will supply NCSIST with two tanks to help develop the upgrade program, though modifications to the rest of the fleet aren’t expected to begin until 2020. Additionally, Taiwan is also considering modifying their CM-11 Brave Tiger tanks following the completion of the M60A3s.
Belgium is considering proposals from the United Kingdom, the United States, and France for their fighter jet competition, but the process has been troubled by legal issues surrounding the French proposal. Belgium is looking to replace its aging fleet of F-16s with 34 new aircraft, but it was revealed that France did not go through the correct tender submission process. France, which is offering the Rafale fighter jet, opted to send a letter offering an industrial partnership if the French fighter was chosen. Both the United States, which is offering the F-35, and the United Kingdom, which is offering the Eurofighter Typhoon, submitted their tenders through the official process. This means that the legal standing of the French proposal is unclear. For the competition to continue, the Belgian government will need to reach a conclusion regarding the legal standing of France’s proposal, as there are political considerations which prevent it from being summarily dismissed. Despite these difficulties, Belgium still plans to select a new fighter in 2018.
Amid rising uncertainty surrounding the future of the Eurofighter program, BAE Systems has announced that it plans to cut over 1,000 jobs in the UK. The cuts will primarily focus upon “redundancies” within the Eurofighter production program and are seen as a way to further extend the program in the hope of future orders. The cuts will primarily be targeted at the Samlesbury factory in Ribble Valley, where the central fuselage is manufactured, and the final assembly facility in Warton, Lancashire.
Slowing of Eurofighter production has been largely expected across industry as the European cancellation of Trance 3b orders has meant that non-Kuwaiti production of Eurofighters is slated to conclude in 2019, and many suppliers have planned to shut down and restart in order to support the Italian production of Kuwaiti orders. Extension of the UK line beyond 2019 is aimed at securing a large follow-on order from Saudi Arabia, and maintaining an independent indigenous aerospace as British Members of Parliament and trade union representatives have growing concerns about Britain’s role in future European fighter programs amid Brexit.
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