Posted on 10/23/2003 3:21:34 PM PDT by anotherview
Dror Marom 23 Oct 03 16:37
Sources inform “Globes” that signing the commercial deal for the sale of three Phalcon AWACs planes to India is being delayed, due to Israel Aircraft Industries' (IAI) demand for a exceptionally large down payment.
Ministry of Defense director-general Amos Yaron signed a political agreement in principle in New Delhi several weeks ago to sell the planes. The current negotiations are for the commercial agreement between India and the Phalcons' manufacturer, IAI-Elta Electronics Industries.
The three-plane Phalcon deal is worth $1.3 billion.
Elta is asking for a 25-35% down payment from the India Ministry of Defense. Defense industry sources said, "India does not like down payments."
A source close to the deal added, "IAI has never signed a deal of this size and complexity, with so many and such serious diplomatic ramifications, without receiving a large down payment. The customer must pay it. That is IAI's policy, and the matter is under negotiation.
"The down payment is designed to protect IAI from political pressures, like the ones that forced the cancellation of the Phalcon deal with China." (The Israeli government paid China $350 million in compensation for the 1999 cancellation of the Chinese Phalcon deal - D.M.).
The source continued, "Payments in these deals are made on the basis of progress milestones. US policy is the same. Financing for the Arrow anti-ballistic missile program is received on the basis of the program's progress in Israel. Because of the high risk of the Phalcon deal, IAI has demanded a relatively large cash down payment."
Elta declined to comment to the report.
Published by Globes [online] - www.globes.co.il - on October 23, 2003
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.