The Weekly Wire: For Your Situational Awareness 9.7.18
On September 4, Lockheed Martin announced that all future wings for the F-16 fighter aircraft will be built in India with local partner Tata Advanced Systems Ltd. The announcement came days before Defense Secretary James Mattis and Secretary of States Mike Pompeo were to arrive in New Delhi for talks with their Indian counterparts. Lockheed Martin clarified that the move did not depend on the company winning the contract for the Indian Air Force’s competition for 100 fighter aircraft worth an estimated $13.2 billion. Avascent Analytics expects that the Indian government won’t decide on the outstanding requirement until after the country’s general elections in 2019, and probably not before 2022.
Sierra Nevada has been awarded an IDIQ contract worth up to $1.8 billion for the supply of A-29 Super Tucanos to the Afghan Air Force, raising the existing contract ceiling by roughly $750 million. According to the Special Inspector General for Afghan Reconstruction’s July report, the US Air Force had already delivered 22 of the aircraft with an additional four under production. The program is part of a series of US programs designed to rapidly expand the Afghan Air Force, including a deal for 150 MD-530 armed reconnaissance helicopters and nearly 160 UH-60A+. The A-29 IDIQ will be funded through US Afghanistan Security Forces Funds.
Taiwan’s Ministry of National Defense submitted a budget proposal to the Legislative Yuan, which featured strong spending proposals for the construction of naval vessels. Foremost is a proposed allocation of more than $1.6 billion between 2019 and 2026 towards the construction of a prototype submarine. Over $245 million would be spent in 2019 alone, mostly towards facilities and equipment necessary for submarine construction. Taiwan has never built a submarine before and will likely spend a significant amount of money not just for facilities and equipment for construction, but also on technology transfer and foreign technicians who have experience in submarine construction. The proposed budget also allocates over $1 billion over 11 years towards the construction of 60 fast missile boats, and over $1.1 billion over eight years to build a prototype of a future frigate. These projects are part of a broader national shipbuilding plan worth over $14.5 billion through 2040. The budget proposal did not include a purchase of M1A2 main battle tanks, which Taiwan had expressed interest in earlier this year. This may be due to the Ministry of National Defense placing priority on larger naval projects.
On September 3, Egypt was close to completing negotiations with ThyssenKrupp Marine Systems for two new MEKO A200 corvettes. Egypt previously bought four Gowind 2500 corvettes from Naval Group in 2014, which contained an option in the agreement for another two corvettes. However, it appears that the Egyptian government has decided to buy a different model of corvette rather than exercise that option. The A200 corvettes are expected to be valued at approximately $1 billion, excluding weapons, and would be built in Germany.
As Ukraine considers purchasing surface-to-air missile systems, the Ukrainian Ambassador to the US, Valeriy Chaly, announced that the country was interested in acquiring one air-and-missile defense (AMD) system from the US for $750 million. While the name of the exact system was not called out, that price tag is very similar to the cost of a Patriot AMD system. The acquisition of a Patriot AMD system would be beneficial to Ukraine given the ongoing conflict stemming from the annexation of Crimea in 2014 and the proximity of Russian Iskander missile systems, but the odds that a Patriot acquisition would be completed are fairly low. This is largely due to limits on Ukraine’s defense procurement spending, which will float between $450 million to $550 million over the next five years. The purchase of an expensive AMD system like Patriot would crowd out a lot of ongoing modernization programs and the buildup of the country’s air force and navy. Ukraine would have to find substantial funding for the acquisition in addition to what it currently has budgeted for procurement. Additionally, Ukraine was only recently approved to acquire Javelins after an Obama-era mandate preventing the sale of weapons to Ukraine was overturned by the Trump administration. The potential sale of a Patriot system to Ukraine is likely to face significant hurdles for approval compared to the Javelin acquisition.