The Weekly Wire: For Your Situational Awareness 9/24/20

 In Weekly Wire

UAE

In the wake of successful UAE-Israel normalization talks, the US and the UAE hope to sign an initial agreement for the sale of F-35 fighters to the Gulf nation by December 2. This side deal is thought to be a significant component of the overall UAE-Israel normalization agreement. However, the deal faces challenges from US legal requirements to maintain Israel’s qualitative military edge over other nations in the regions. Sources have indicated that the US will seek to meet this requirement by degrading the threat that the F-35’s stealth systems present to Israel, though whether this is through a degradation of the capabilities of the UAE’s F-35 or though augmentation of Israeli forces was not disclosed.

France

On September 22, the French Armed Forces Ministry announced that the General Directorate of Armaments (DGA) had placed an additional order for 271 Griffon and 42 Jaguar armored vehicles. The vehicles, produced by Arquus and Nexter, respectively, are being procured under the Scorpion program with Thales also receiving contracts for the network element. This is the second order for the vehicles, with an initial contract for 319 Griffon and 20 Jaguar platforms being placed in 2017, enabling first delivery in 2020. Deliveries of this latest batch will take place between 2022 and 2023. In total 1,872 Griffon and 300 Jaguar vehicles are to be procured with 936 Griffon and 150 Jaguar delivered by 2025. Arquus, Nexter, and Thales are the three prime contractors for the Scorpion program with Thales responsible for the information and communication system. The program will see the eventual replacement of the French army’s VAB, AMX-10RC, and Sagaie vehicles.

Austria

The Austrian Ministry of Defense has selected the AW169M from Leonardo Helicopters to replace its 20 Alouette III, which have been in service since the late 1960s. The overall contract is said to be worth €300 million ($350 million) for 18 new units to be deployed to the Austrian Army by 2022.

The AW169 was running as a challenger against the regional favorite H145M which is known for its combat proven experience in European armed forces and potentially lower cost per flight hour. The AW169M was also facing the Bell 429 from Bell Textron, known for its cost-efficiency but lacking a militarized version (the Bell 429 is not in service in the US armed forces).

The decisive criteria were Austria’s planned cooperation with Italian armed forces that are also procuring 100 AW169Ms, and on the short lead-time, both factors having positive repercussions on platforms production costs and availability, whereas the H145M production line has longer lead-time due to the German order of 60 units to be delivered by 2024.

Egypt

Egypt has reportedly selected MBDA’s VL-MICA anti-air missiles to equip its three new MEKO A200 frigates, following the failure of an earlier deal with Denel’s Umkhonto-IR missile. The Umkhonto deal fell through due to issues over financing guarantees. Specifically, TKMS on behalf of the Egyptian Navy, paid Denel R1.5 billion ($88.9 million) out of the R4.5 billion ($266.9 million) contract. This initial payment would help cover ramp-up costs. However, Denel must pay these funds back should they be unable to fulfill the contract, making this initial payment a security deposit of sorts. Customers usually require a bank to guarantee that this “deposit” can be repaid in such an event. But Denel has been in dire financial straits for the past several years, and no bank was willing to lend Denel the funds it needed. Denel had previously gone to the South African government in 2019 for an emergency bailout to help pay basic costs such as salaries. But in August 2020, Denel stated that it did not plan to seek further bailouts. The failure of the Umkhonto sale is larger than just the R4.5 billion contract, as part of the contract would have supported development of the radar guided Umkhonto-R missile, which has not flown yet. Combined Umkhonto-IR and future Umkhonto-R orders were projected to potentially grow to over R30 billion ($1.78 billion). Denel’s financial woes and the subsequent loss of talent put its future in serious jeopardy.

Australia

Australia has delivered its latest Austal-made Guardian-class patrol boat to the Republic of Palau at the shipbuilder’s Henderson, Western Australia headquarters. The new vessel, dubbed the PSS President H. I. Remeliik II, will join Palau’s Division of Maritime Law Enforcement where it will likely engage in missions relating to fisheries protection, trans-national crime, and search and rescue. The transfer is part of the Australian government’s Pacific Maritime Security Program (PMSP), which seeks to enhance maritime security collaboration throughout the south Pacific. The PMSP calls for Australia to deliver a total of 21 Guardian-class patrol boats to 12 neighboring island nations (and Timor Leste) through 2023. The delivery to Palau comes on the heels of two earlier handovers to the Kingdom of Toga in June 2019 and to Fiji in March 2020.

Thailand

On September 21, Thailand budgeted for the procurement of an additional 10 Stryker 8×8 vehicles for the Thai Army. The contract is valued at 900 million baht (approximately $28.5 million) with delivery expected in 2021. Thailand had previously purchased 70 Strykers in 2019, and 50 more in 2020. The last 10 vehicles will help the Thai Army meet its goal of outfitting three infantry battalions. The sale of Stryker vehicles to Thailand is part of a larger effort by the US to limit growing Chinese market share in Thai defense procurements. For Thailand, the new Strykers will be used for territorial defense and ground combat operations.

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