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Facing heavy US pressure to choose an American system rather than a cheaper sophisticated Israeli one, South Korea decided over the weekend to delay its decision till May for early warning aircraft.
South Korean defense officials said the delay was due to a failure by the bidders to submit data of key technologies. The decision for the lucrative arms deal worth well over $1 billion was originally to have been made by December 31 for four airborne early warning and control systems (AWACS).
The fierce competition is between Israel Aircraft Industries and Chicago-based Boeing. IAI's Elta is offering its Phalcon radar mounted on a General Dynamic's Gulfstream G550 aircraft against Boeing's 737-700 equipped with Northrop Grumman's L-band radar.
"We've decided to put off the selection as both bidders failed to submit details of key communication equipment of their systems," Col. Cha Jong-hwan at the South Korean defense ministry's weapons acquisition office told reporters in Seoul.
Postponing the decision actually favors Elta since it gives their team an additional five months to secure US export license for communication codes. A spokesperson for Boeing reportedly rejected the notion they had failed to meet the deadline and had submitted all required technological data by last September.
"Boeing has met the requirement on time to obtain the US government export licenses for sensitive equipment of US origin based on the need to share technical details of our solutions with the customer and to assure South Korea of Washington's acceptance of our plans to provide certain equipment," Maggie Kymn, communications director of Boeing Korea, was quoted as saying in the Korea Times.
Boeing has enlisted the US ambassador to South Korea to pressure Seoul to purchase their system. They have citied the need for purchasing US-made equipment so they could be interoperable with American forces stationed in the region.
The United States and its defense industries have held a long-standing hold over Seoul. But this is beginning to break. Earlier this month, a French-German consortium that manufactures the Eurocopter knocked US firms out of the bidding for a major Korean helicopter project.
Numerous reports have appeared in the Korean press that the South Korean air force has tentatively selected the Elta Phalcon radar on the Gulfstream G550 since the ministry plans to choose the lowest bidder that meets the air force's operational requirements. Elta's proposal is reportedly asking $1.1 billion.
Boeing's price tag is $1.5 billion. Elta and General Dynamic's Gulfstream Aerospace recently teamed up with the US-based DRS Technologies to supply the communications suite in their offer. Over 50 percent of the IAI contains US content.
DRS is working feverishly to get export license for five items of critical data links that allow the aircraft to exchange information on military tactics and situations with each other and ground stations. These also include the key IFF (identification Friend or Foe) codes.
Elta officials are confident the required US export licenses would be secured for the DRS equipment.
Elta's Phalcon system, and its predecessor, have over 10 years of experience. IAI sold it to China, but the United State torpedoed that deal. The India Air Force agreed last year to purchase three systems to be installed on a Russian Il-76. IAI lost a competition with Boeing to sell the system to Turkey and Australia.
Elta claims its Phalcon system is very versatile. It has already been installed on a Boeing 707 in Chile and will be installed on a Russian Ilyushin-76 for India's Phalcon.
The Israel Air Force chose it for its Gulfstream 550 long-range business jet configured with Elta's Phalcon system. Korea has already purchased a number of Israeli weapons systems; including IAI's Harpy anti-radar suicide drones and the EHUD debriefing system for air combat training. South Korea has also purchased the Popeye-2 standoff missile and night vision systems.
South Korea has no air surveillance system of its own and relies on US reconnaissance aircraft based in Okinawa, Japan.