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| Naval helicopter deal with US hinges on funding Sunday, June 18, 2006 ANKARA - TDN Defense Desk A critical Turkish program for the procurement of naval helicopters from U.S. manufacturer Sikorsky Aircraft largely depends on the availability of “a reasonable financing package,” Turkish procurement officials said. They said that although a U.S. Export and Import Bank (Ex-Im) funding scheme had been made available to finance the deal, Ankara would abstain from using it due to its high costs. The contract involves the off-the-shelf purchase of 12 S-70B Seahawk naval helicopters, worth around $380 million. “The Ex-Im Bank financing is too expensive,” said Murad Bayar, Turkey's chief procurement official. “There should be an alternative and reasonable funding method if this deal is to go ahead.” Bayar's remarks represent a major policy change for Turkey, which until recently had insisted that the U.S. Ex-Im loan's availability was critical for the Seahawk deal. “The terms and conditions for the loan have widely changed, making its use irrational,” Bayar said. “We are now seeking alternative funding. … either through the (Turkish) Treasury or another method.” The Bayar-led Undersecretariat for the Defense Industry (SSM) and Sikorsky Aircraft signed a memorandum of understanding for the S-70B sale last June. Sikorsky officials said that talks with the SSM on the deal's funding were continuing. The U.S. Ex-Im loan's history dates back to the early 1990s. Ex-Im issued a $1.3 billion credit package for Turkey to buy Sikorsky-made military helicopters in 1991. Turkey used an initial portion of $450 million to buy some 45 S-70 Black Hawk utility helicopters for the Army. In 1999 another $500 million was used for a second batch of 50 Black Hawks. A nearly $320 million loan portion still was available, and Turkey wanted to use this money to finance the purchase of Sikorsky-made naval helicopters. Following requests by Sikorsky and Turkey, the U.S. Ex-Im in January extended the loan's deadline from early 2008 to the end of 2009. At the time the move was considered a breakthrough for the Seahawk deal's finalization. But this time Turkey's reservations emerged regarding the credit's cost. Turkey bought a first batch of eight Seahawks worth over $200 million through other funding means in the early 2000s, but one of the platforms crashed shortly after delivery. The S-70s are based on U.S.-made frigates. |