ISRAEL PLANS SPY SATELLITE SALES TO TURKEY, SINGAPORE / MID-EAST
NATION FEARS U.S. MAY SCUTTLE ONE OF THE DEALS
By BARBARA OPALL-ROME
posted: 12:00 am ET, 24 July 2000
TEL AVIV, Israel -- Israeli officials insist they have
fully coordinated with Washington on the potential sales of spy
satellites to Singapore, Turkey and other nations.
Nevertheless, Israeli officials fear the United States might try to
scuttle one of those deals just as it insisted that Israel cancel
the sale of Phalcon early warning aircraft to China.
"These satellites have strategic applications, and as such, have
been fully coordinated with Washington," a senior Israeli Ministry
of Defense official told Space News.
U.S. Embassy officials here refused to comment on Israeli
assertions, referring the issue to Eric Newsom, U.S. assistant
secretary of state for political military affairs, who chairs a
joint U.S.-Israel Technology Transfer Working Group.
A State Department official said July 14 that Newsom was on travel
and could not be reached for comment, but added: "Israel is a close
ally and we have discussions on a wide range of topics, including
remote sensing. But such discussions are sensitive and we will not
comment on them."
The Israeli Ministry of Defense official noted that Israel's
coordination efforts with Washington began in 1998, during
negotiations with South Korea over the sale of a camera and other
technology developed for Israel's Ofeq series of spy satellites.
The camera eventually sold to South Korea has a 1-meter
spatial resolution for black and white imagery, which is sharp
enough to detect ground objects of that size, and four-channel
color pictures with 4-meter resolution.
Defense and industry sources here said ongoing contract
negotiations with Turkey and Singapore may be more sensitive than
the Korean deal, because potential contracts to those nations
involve not only the camera and related equipment, but the entire
reconnaissance spacecraft.
The South Korean program requires El-Op Electro-Optics Industries
Ltd., now part of Elbit Systems Ltd. of Haifa, to provide the
camera to the Korea Aerospace Research Institute for installation
aboard Seoul's planned Multipurpose Satellite-2, or
Kompsat-2.
"The South Korean deal was $50 million, tops. But here we're
talking more than $1 billion worth of business between those two
countries alone. . . . This could cause heartburn in Washington,
not because of security concerns, but because of competitive
business interests," an Israeli industry executive said.
He noted that El-Op competed with six contenders for the South
Korean contract, including Bethesda, Md.-based Lockheed Martin
Corp. "If U.S. business interests influence Washington, as we're
sure they did with the Phalcon contract, we may be heading for
trouble."
In a July 5 interview, Dan Meridor, chairman of the Israeli
Parliament's Foreign Affairs and Defense Committee, said Israel's
first priority was to respond favorably to U.S. national security
concerns. Nevertheless, he noted that cancellation of the Phalcon
deal would impact adversely on the credibility of the Israeli
defense industry on the global market.
"The issue not only with Phalcon, but with future items that may
arise in the context of our bilateral relationship, is how to
distinguish between national security concerns and other factors,"
Meridor said.
Officially, Israel's Ministry of Defense refuses to confirm
or deny reports of a potential $1 billion contract to jointly
develop a series of spy satellites for Singapore. The program,
first reported in the July 3-9 edition of London-based Jane's
Defence Weekly, is expected to match or exceed the capabilities of
the Israeli Ofeq satellite.
As for the Turkish program to build a remote-sensing satellite,
first reported in July 6 issues of the Ankara, Turkey-based Millyet
daily, officials here are less restricted, but nevertheless
circumspect. During a visit to Ankara earlier this year, Israeli
Prime Minister Ehud Barak spoke openly about Israeli-Turkish
cooperation in the field of space, but declined to provide
details.
Turkish Defense Minister Sabahattin Cakmakoglu was more forthcoming
in addressing the issue, when he denied an essential element of the
Millyet story, which asserted that Israel Aircraft Industries (IAI)
of Lod, Israel had won the contract with its bid of $274
million.
In a July 6 statement, Cakmakoglu insisted, "Two companies meet our
criteria and were authorized to provide offers, but nothing has
been finalized." Cakmakoglu was referring to the French aerospace
company Alcatel and an Israeli consortium led by Israel Aircraft
Industries.
An Alcatel official confirmed that the company is competing with an
Israeli consortium for the Turkish surveillance satellite project
and that the Turkish government has not yet decided on a winner,
but declined to comment further.
Meanwhile, Turkey's military procurement authorities say they soon
will determine the winner in the National Satellite project,
estimated to be worth several hundred million dollars. Authorities
in Ankara said the Turkish Treasury already has issued loan
guarantees for the program.
"We are close to a decision," said a senior military procurement
official. "This is a priority program we wish to make operational
rather quickly."
Turkish procurement officials said the IAI-led consortium, which
consists of Elbit and Rafael Armament Development Authority of
Haifa, recently made a radical move and cut its bid to $206 million
to defeat its French rival. "With the move, the Israelis have come
quite close to sealing the contract," noted one Turkish procurement
official.
An aviation industry official said, "All eyes are now on Alcatel,
which is expected to cling to the deal and cut its price." He
added, "They must revise their price if they want the
contract."
Space News correspondent Burak Ege Bekdil and staff writer Peter B.
de Selding contributed to this report from Ankara and Paris,
respectively.
