Malaysia Firm Wins $2.8 Billion Navy Ship Deal

KUALA LUMPUR - A Malaysian shipbuilder says it has won a 9 billion ringgit ($2.8 billion) deal from Kuala Lumpur for six naval vessels developed by French manufacturer DCNS.

In a filing with the local bourse Dec. 16, Boustead Naval Shipyard said it was given a letter of award by the Malaysian defense ministry to build and deliver six "second generation patrol vessels littoral combat ships."

"The delivery of the first of class ship is estimated in 2017 with follow on ships every six months thereafter," it added.

Last week Boustead said it had been selected by Malaysia's navy to build the corvettes, which DCNS says can stay at sea for three weeks and are designed to navigate coastal areas and island groups to fight piracy and patrol fisheries. The vessels are 330 feet long and can each transport one EC275 helicopter made by Eurocopter, a subsidiary of EADS.

DCNS already had a relationship with Boustead through a joint venture in 2009 to maintain two diesel-propelled Scorpene submarines used by the Malaysian navy.

DCNS has previously sold 11 frigates to Malaysia's neighbor Singapore, five of which were built in the city-state.

Rafale Best Jet On Offer for Brazil: French PM

SAO PAULO - French Prime Minister Francois Fillon said Dec. 14 he was confident of selling Rafale fighter jets to Brazil and could beat off rival bids because the aircraft's technology cannot be matched.

The Rafale is competing against Boeing's F/A-18 Super Hornet and Saab's Gripen for a tender from Brazil to supply 36 multi-role combat aircraft.

The French premier begins a three-day visit to Brazil on Dec. 15."We are confident because we believe that the French offer has the best possible transfer of technology, without equivalent," Fillon said in an interview published with local media.

French Defense Minister Gerard Longuet was quoted earlier this month in Le Monde as saying that unless the Rafale can find a foreign buyer, the government will have to stop funding its production by Dassault Aviation.

The Rafale was used in the recent war in Libya but the fighter has repeatedly lost out in tenders in countries including Singapore, South Korea, Morocco and, earlier this month, Switzerland.

Alenia, Cassidian To Explore UAV Cooperation

PARIS - In a bid become major industrial players, Italy's Alenia and EADS defense and security unit Cassidian have signed a preliminary agreement to explore cooperation in medium-altitude, long-endurance and combat UAVs, the companies said in a Dec. 14 statement.

"A Memorandum of Understanding was signed between Cassidian on behalf of EADS Deutschland GmbH and Alenia Aeronautica SpA to jointly investigate the potential cooperation in the field of medium-altitude long-endurance (MALE) unmanned aerial systems (UAS) and unmanned combat aerial vehicles (UCAV)," a joint statement said.

"Alenia and Cassidian are aiming to strengthen their technological know-how in order to establish a leading role in the UAS market," the companies said. "Thanks to this agreement, the two companies will analyze the requirements expressed by each of their respective governments in the UAS sector with the objective to create a strategic partnership and to expand their global UAS market share.

Cassidian sought the agreement with Alenia to extend its work on the Talarion advanced UAV.

"We look forward to investigating further collaboration with Alenia Aeronautica around a next-generation MALE UAS, like for instance the Talarion, which is of outmost importance for Europe's military aviation industry," Cassisian chief operating officer Bernhard Gerwert said in the statement.

France, Germany and Spain have shown no willingness to sign a development contract for the Talarion after EADS delivered its 60-million euro risk reduction study.

Alenia sees cooperation with EADS as a way of staying current in the UAV market.

"The UAS sector has a strategic importance for the future of Alenia Aeronautica's programs, and we are convinced that this agreement will allow us to become even more competitive in this quickly expanding market," Giuseppe Giordo, chief executive of Alenia Aeronautica and Alenia Aermacchi, said.

An Anglo-French cooperation military treaty, which includes collaboration in UAVs and UCAVs, has sparked concern in Germany, Italy and Spain that the agreement is exclusively bilateral and locks out other European partners.

ThyssenKrupp Concentrates Shipbuilding on Military Sector

BONN, Germany - ThyssenKrupp AG will concentrate its Marine Systems on military surface ship and submarine building in the future, the company announced Dec. 12, adding that it will sell all its civil shipbuilding activities to British company Star Capital Partners.

The contract, signed with the London-based financial investor company on Dec. 11, includes the large yard builder Blohm + Voss Shipyards, Blohm + Voss Repair, Blohm + Voss Oil Tools and Blohm + Voss Industries, including its subsidiaries. According to ThyssenKrupp, the new investor wants to continue the business at all sites.

"The sale is an essential step to further focus the activities of ThyssenKrupp Marine Systems," Hans Christoph Atzpodien, CEO of ThyssenKrupp Marine Systems AG, said in a news statement. "At the same time, with the new owner, an important course-setting to secure the work places and the future of the shipbuilding at the locations of Blohm + Voss has been taken for the employees."

The deal still has to be approved by oversight committees. ThyssenKrupp expects the deal to be completed at the end of the first quarter of 2012. The transaction reflects its strategic development concept unveiled May 13. It is supposed to improve the Essen-based company's competitive position and offer a sustainable future.

In August, there had been media speculation about a joint venture involving ThyssenKrupp Marine and French ship-building group DCNS. This was strongly denied by the German company at that time, which said that it saw little promise of close cooperation in the submarine or surface naval vessel sector.

Australia Courts 3 Firms for Sub Fleet

SYDNEY - Australia said Dec. 13 it had invited three companies from France, Germany and Spain to submit designs for its new submarine fleet, a project expected to span the next 30 years.

Defence Minister Stephen Smith said Canberra had asked French naval defense firm DCNS, Spain's Navantia and HDW of Germany - a ThyssenKrupp subsidiary - to submit designs for the program, which will see 12 new submarines built.

"The Future Submarine Project is a major national undertaking and is of a scale, complexity and duration never before experienced within (the) Defence (Department)," Smith said, adding that Australia would need a "significant amount of help from overseas."

"The submarines will be constructed over the course of the next three decades."

Jason Clare, minister for defence materiel, said the Future Submarines Project would involve hundreds of companies, thousands of workers and many skills that "do not currently exist in sufficient numbers."

"Some of those skills are available overseas, others will have to be grown here. Now is the time to develop a plan to make sure we have the skills we need when we start designing and building the submarines," he said.

Australia unveiled plans in 2009 to spend more than $70 billion boosting its military capability over the next 20 years.

Rheinmetall, Thales Win Australia Vehicle Deals

SYDNEY, Australia - Germany's Rheinmetall MAN and French company Thales won contracts Dec. 12 worth billions of dollars to supply thousands of new military vehicles for the Australian Defence Force.

Rheinmetall MAN Military Vehicles Australia will provide up to 2,700 protected and unprotected medium and heavy vehicles, Defence Minister Stephen Smith said.

There will be an option for approximately 1,000 more for training purposes.

"The new vehicles will improve performance and protection, as well as provide commonality across the fleet which will improve Army's training and logistic support requirements," said Smith.

He declined to say what the contract was worth, saying only that it was expected to be more than an original budget estimate from August 2007, when the government targeted about 3 billion Australian dollars for replacement vehicles.

In addition, Thales Australia's Hawkei unit was selected as the preferred supplier for a 1.5 billion-Australian-dollar contract to supply up to 1,300 protected and unprotected light vehicles, Smith added.

No further details were given.

Germany Hands Over Anti-Piracy Mission Command

BONN, Germany - Spain is the new lead nation of maritime task force 465 on an anti-piracy mission in the waters around the Horn of Africa. German flotilla Adm. Thomas Jugel handed the command of the European Union's flotilla Atalanta over on Dec. 6 to Spanish Capt. Jorge Manso.

Jugel had been commanding the task force of six ships and eight helicopters from Germany, Spain, the Netherlands and France for the past four months.

In a report issued by the German military, he spoke about the decline in the number of successful pirate raids from 50 in 2010 to 20 so far in 2011. According to the German admiral, more and more ships are passing the area registered and preferably in a convoys. In addition, the EU warships in May were granted a more offensive mandate to tackle the situation.

German Defense Minister Thomas de Maizière, who visited the troops in Djibouti for the occasion, said he regarded the operation so far as a success. However, he warned that the military mission only fights the symptoms. A final solution requires that constitutional structures be established in Somalia, and the pirate masterminds had to be found and their cash flows cut off, he said.

Just a few days before the change in command, the German parliament voted to extend the country's participation in Atalanta for one more year. In the coming month, the German Navy will take part with about 500 troops, one frigate and a P3-C Orion maritime patrol aircraft. The upper limit of the mandate is 1,400 troops.

France Willing to Help Libyans With Training

TRIPOLI, Libya - France is ready to offer military training to Libya and is examining ways to boost its cooperation with the new regime, French army chief of staff Adm. Edouard Guillaud said Dec. 5.

"France is ready to provide what the Libyan government asks for, particularly in [military] training," Guillaud said after talks with Libyan leader Mustafa Abdel Jalil and Defence Minister Osama Juili.

He said his visit was to "contact our Libyan counterparts after the revolution, to see how to cooperate now that peace has returned."

"We had relations with the former Libyan Army. We will revive them, either with the Navy, Air Force or Army."

Asked if arms sales were discussed with Libya's leaders, Guillaud replied: "I am a user, not a seller, of weapons."

France spearheaded the NATO operation which helped topple Moammar Gadhafi, who was captured and killed Oct. 20 after ruling Libya for more than 42 years.

EU May Use Brussels HQ for Horn of Africa Ops

BRUSSELS - EU foreign affairs ministers are considering using a civil-military headquarters in Brussels for small-scale operations off the Horn of Africa.

In conclusions to their meeting here Dec. 1, they say they have agreed "to accelerate planning for the activation of an EU Civil-Military Operations Centre for Horn of Africa operations, at the latest by the next Foreign Affairs Council."

The next EU affairs meeting is scheduled for late January. Currently EU operations have their HQs in individual member states.

According to an EU ministers statement, "When the nature of the operation does not require a national HQ, the Council stands ready to activate on an ad-hoc basis the Operations Centre in accordance with its terms of reference for a specific Common and Security Defence Policy [CSDP] Operation."

The decision appears to signal a U-turn in the U.K.'s stance on the issue. Back in the summer, Catherine Ashton, the EU's high representative for foreign and security policy, proposed an EU HQ for planning and carrying out EU military and civil missions abroad. In July, U.K. Foreign Affairs Minister William Hague said, "the U.K. will block any such move now and in the future."

The EU is currently running two operations in the Horn of Africa - the Atalanta counterpiracy mission and the EU training mission in Somalia. The Brussels' operations center may be used for any new, small-scale contributions to the Horn of Africa, such as building regional maritime capacity, said an official from the EU's Military Staff.

Where the EU has an existing command structure, such as Atalanta at the Northwood HQ in the U.K., an official from the EU Military Staff said "there is no intention of changing a working system on conduct.

"For Atalanta in particular, they are extremely well-placed in Northwood - allowing synergies with the NATO counterpiracy operation - and the scale of the command is far outside of the capacity of the Brussels' operations center," he added.

"We need to help regions [off the Horn of Africa] conduct counterpiracy themselves," Lt. Gen. Ton Van Osch, director-general of the European Union Military Staff, told Defense News in an interview. "A new line of EU action is to help countries develop their own coast guards and navies. Here, the EU military could do the training as part of a civilian mission if the political and security committee decided on a mission."

In the interview, Van Osch gives his views on various issues, including pooling and sharing proposals relating to air-to-air refueling and smart munitions.

On pooling and sharing, ministers recalled "the need to develop cooperation on military capabilities on a longer term and more systematic basis," and stressed the need "to further examine the impact of reduced defense spending on capabilities, including its possible impact on key industrial and technological capacities to be maintained and developed in Europe."

The ministers also encouraged further coordination between the European Defence Agency and the European Commission, "in particular in the field of Research and Technology, in particular regarding the new European Framework Programme for Research and Technology (Horizon 2020)."

They also recalled the commitment of the EU defense chiefs to establish or widen collaborative pooling and sharing projects by mid-2012, urged member states to take on the role of lead nation for concrete projects, and "will assess the progress made in April 2012."

They also stressed "the need to further analyze and address the constraints related to the availability, usability and deployability of existing military capabilities in CSDP operations and missions."

In addition, they bemoaned the fact that, in the first semester of 2012, "only one [EU] battlegroup will be on stand-by" and called for "efforts in order to remedy such shortfalls in the future."

Switzerland Investigates Leaked Fighter Jet Report

GENEVA - Swiss prosecutors have launched a probe into a violation of official secrecy after reports related to the purchase of new fighter jets were leaked to the media, a judicial source said Dec. 2.

The federal prosecution office confirmed the launch of the investigation to AFP following reports in local dailies Tages-Anzeiger and Bund.

The probe concerns two classified reports by the Swiss air force that were critical of the Swedish Gripen aircraft, manufactured by Saab, and which were sent to another newspaper, the Basler Zeitung.

The reports were published just days before the Swiss government's decision on which type of combat aircraft to buy.

Despite the damaging reports, the Swiss government opted for the Gripen in the deal worth more than 3 billion Swiss francs (2.5 billion euros), over rival models the French Rafale and the Eurofighter.

Dassault Critiques Financial Logic of Gripen Pick

PARIS - Dassault criticized the financial logic of selecting the Saab Gripen after Switzerland selected the Swedish single-engine fighter jet over the competition rivals Eurofighter Typhoon and the French-built Rafale.

"The 'Swiss-tailored' Gripen only exists on paper. Its technical development and production risk significantly increasing the financial efforts required of the Swiss authorities to accomplish the country's fighter aircraft program," the Dassault-led Rafale International team said in a Nov. 30 statement.

The Rafale reaction came after Switzerland earlier announced it would buy 22 Gripen fighters to replace its fleet of F-5 Tigers.

A Rafale selection would have met the Swiss operational requirements with a smaller number of aircraft "at an equivalent or lower cost," the Rafale industrial team said. Those capabilities had been "demonstrated during the assessments by the Swiss Air Force," the statement said.

The Rafale team regretted that the Swiss authorities "knowingly decided not to position Switzerland at the highest European level as regards to the performance of the new fighter aircraft," the statement said, quoting the Swiss Federal Council.

Saab welcomed the Swiss selection of the Gripen.

"Given that Switzerland is known globally for applying (the) highest procurement standards and requesting state-of-the art technologies, Saab is both proud and delighted that Gripen has been chosen as the Swiss Air Force's future multirole fighter aircraft," Saab said in a statement.

"The Gripen program will create a long-term partnership between Switzerland and Sweden. Saab assures Switzerland a long-term strategic industrial co-operation aimed at creating sustainable high tech jobs, transferring technology and generating export business," the statement said.

The Rafale team said it had reached out to 250 Swiss companies to create a local industrial partnership in the 26 Swiss cantons.

The Swiss defeat follows a setback in the United Arab Emirates for the Rafale, with Dassault's bid described as "uncompetitive and unworkable," by the Abu Dhabi Crown Prince Sheikh Mohamed bin Zayed, who is also deputy supreme commander of the armed forces.

EDA To Set Up Pilot European Satellite Procurement Cell

BRUSSELS - National defense ministers from 26 of the European Union's 27 member states (Denmark has an opt-out) have granted the European Defence Agency (EDA) a budget of 30.5 million euros ($40.7 million) in 2012 and agreed the agency should set up a pilot European satellite communication procurement cell.

Despite a considerable amount of talk about the importance of EU member states pooling and sharing more military capabilities and the ongoing financial crisis, there was precious little agreement on concrete initiatives with specific timelines.

At a news conference Nov. 30, EDA Chief Executive Claude-France Arnould described satellite communications as a "key enabler of any operation," allowing "soldiers to communicate, ships to navigate, HQ to operate in theater."

The new procurement cell will involve six to eight member states including the U.K., said Arnould.

It will be up and running straight away. Currently, member states spend about 3 million to 5 million euros per year to acquire satellite communications bandwidth. Demand is growing, particularly with the widespread use of UAVs on the battlefield, which require substantial communications capacity to control and transmit data from sensors.

The pilot program is designed to prove that pooling demand will reduce both costs (10 percent estimate) and ensure better availability (security of supply and rapid access). Astrium has been selected as the broker for this activity following an open competition.

Arnould said air-to-air refueling was a "major capability shortfall, as shown again in Libya," and that the aim "is to improve operational output and cost effectiveness and to address the dependency on the U.S. of European air forces."

Speaking privately, an EU official said that a medium- and long-term aim is to convince EU member states to reduce the current nine refueling fleets down to four (A400M, C130J, Airbus 330 and B767) and not to buy outside those aircraft types.

Another option Arnould noted is for those member states that are not buying A400Ms to instead purchase kits or pods allowing them to refuel from the A400M.

She stressed that there were "no proposals on the table for common procurement of new equipment" and that "capability is not just about acquisition." Training helicopter pilots is one example of a capability that the EDA has been working on since 2009.

The other eight areas for further consideration include maritime surveillance networking (currently covering EU borders only but might be extended for expeditionary tactical operations such as the Atalanta counter-piracy operation); medical field hospitals; future military satellite communications; ISR; pilot training; European transport hubs; smart munitions (the Libya operation showed that EU member state stockpiles were insufficient and that there was an overdependence on the U.S.); and naval logistics and training (capabilities such as aircraft carriers could be made available at all times by synchronizing maintenance schedules on a multinational basis).

Arnould also stressed that the EDA is working to coordinate with NATO as "cooperation is not a beauty contest between NATO and the EDA." She said the EDA would continue work on pooling and sharing, with a more comprehensive agenda coming out in the spring, just before NATO unveils its so-called smart defense proposals at its Chicago summit.

The key question is whether EU member states will follow up with concrete proposals in the 10 pooling and sharing areas other than the satellite communications cell. Regardless of how many proposals the EDA comes up with, that appears to be in doubt.

Arnould said there was "clear momentum for moving forward" and "an important window of opportunity to improve European defense capabilities" but conceded that "cooperation is not a natural reflex" and that "there are concerns, in particular about sovereignty and autonomy."

EU defense ministers also approved an administrative cooperation agreement between the EDA and Switzerland, under which the two parties can work together on research and technology, and armaments cooperation. The framework agreement sets out procedures for mutual consultation as well as for Swiss participation in ad hoc EDA programs and projects.

Eurocopter Joins Turkey's Light Helicopter Race

ANKARA - Top European helicopter maker Eurocopter announced Wednesday that it will seek to become Turkey's key foreign partner in a program, worth more than $1 billion, to design, develop and manufacture hundreds of light utility helicopters, both military and civilian.

"We want to partner with Turkey in one of their top programs. The light utility helicopter program is a key project," said Thomas Hein, Eurocopter's vice president for sales and customer relations in Europe.

Under two multibillion-dollar contracts, Turkish Aerospace Industries (TAI) is co-producing with Italy's AgustaWestland 59 T-129 attack helicopters and jointly is making with Sikorsky Aircraft more than 100 T-70 utility helicopters, with a single copter weighing about 10,000 kilograms. To meet its heavy-lift helicopter needs, Ankara earlier this year signed a nearly $400 million contract with Boeing to buy six CH-47 Chinook choppers.Light utility helicopters generally weigh between 4,500 and 5,500 kilograms. "We are developing our product range, and we would like to produce, with Turkey, a chopper from scratch," Hein said.

Therefore, light utility helicopters are the last major copter type Turkey wants to produce with a foreign company.

"In my personal view, all major helicopter producers in the world will seek this cooperation with Turkey," Hein said.

Formed in 1992 through the merger of the helicopter divisions of France's Aerospatiale and Germany's DASA, Eurocopter sold 20 AS 532 Cougar utility helicopters to Turkey's military and then co-produced with TAI 30 other Cougars. But since 2006, the company has been silent about major Turkish helicopter deals, and Wednesday's remarks by Hein, who is responsible for ties with Ankara, means Eurocopter is back in the Turkish market.

Although it mainly is a defense project, the light utility program also will manufacture many private and commercial copters. But the Undersecretariat for Defense Industries (SSM), Turkey's procurement agency, has not formally announced the program. The Turkish government is expected to select a foreign partner in 2013. As a result, the number of helicopters to be produced and the financial size of the program are not clear, although the cost is expected to exceed $1 billion.

Although Eurocopter has developed tens of helicopter types in several categories, SSM insists on the development of a new type, and Hein said Eurocopter is ready to produce a new light helicopter with Turkey.

Eurocopter is part of European defense giant EADS.

Brazil Boosts Navy, But Fleet's Age, Size a Concern

SAO PAULO - As it bids for great power status, Brazil is boosting its naval power in the South Atlantic with an ambitious submarine program to protect its huge deep-water oil reserves and project its growing influence.

BRAZIL'S AIRCRAFT CARRIER Sao Paulo is seen in the Atlantic Ocean near Rio de Janeiro. (Brazilian Navy via AFP)

The emerging powerhouse already boasts Latin America's largest navy, but its aging fleet, including the Sao Paulo aircraft carrier - formerly the French Navy's Foch - nine British-built frigates and five coastal diesel-electric submarines, is in urgent need of modernization.

"The fleet is currently inadequate to carry out its assigned missions" in the South Atlantic, an area Brasilia regards as of high strategic value, Nelson During, chief editor of Brazil's respected defense website DefesaNet, told AFP.

Under the National Defense Strategy unveiled in 2008, the navy was tasked with developing a force to protect the country's huge "sub-salt" oil reserves, the Amazon river basin and its 7,491 kilometers (4,655 miles) of coastline.

The oil fields, located off Brazil's southeast Atlantic coast beneath kilometers of ocean and bedrock, could contain more than 100 billion barrels of high-quality recoverable oil, according to official estimates.

In a speech to the Navy's top brass in June, President Dilma Rousseff stressed that the buildup, including the acquisition of the country's first nuclear-powered submarine, was a key "instrument of deterrence."

Earlier this month Adm. Luiz Umberto de Mendonca told a congressional panel that some $117 billion would be needed by 2030 to fund the buildup, including the acquisition of 20 conventional submarines, six nuclear-powered ones and the creation of a second fleet to be based on the northeastern coast.

But During said such plans were "totally unrealistic given the 26 percent cut in this year's 15 billion real ($8 billion dollar) defense budget," adding that the navy only gets a third of that.

"We don't have the money and defense is not a priority in Congress," During added. "There is a feeling that we are a large country at peace with the world, with no external conflicts."

Eric Wertheim, an analyst with the US Naval Institute in Annapolis, said that Brazil, with "a powerful economy and around 200 million people ... must be able to defend its deep-water oil fields and protect the Amazon region.

"The country (must) also be ready for an unpredictable future that might include demands like escorting merchant ships that are vulnerable to piracy attacks on the other side of the world," Wertheim, who edits the Naval Institute Guide to Combat Fleets of the World, told AFP.

The recent oil spill from a well operated by a U.S. energy firm off Rio de Janeiro state "showed how unprepared the navy was to deal with such emergencies," he said.

The centerpiece of the naval buildup is the ProSub program, under which France is to supply four diesel-electric submarines and help develop the non-nuclear components of Brazil's first nuclear-powered fast attack submarine.

Except for the first boat, expected to be ready around 2016, all submarines are being built, with French technology transfer, at the Itaguai naval base and shipyard near Rio.

Brazil already has the uranium enrichment technology required for producing nuclear fuel and wants to use it to power the submarine.

But During said that because of repeated delays, the $2.66 billion nuclear submarine was not expected to be completed before 2025.

In addition to its deterrence value, a nuclear sub would give Brazil "status" and add "credibility" to its ambition to become a permanent member of the U.N. Security Council, he added.

Brazil also "intends to show the flag" in the South Atlantic, in view of its growing trade ties with African countries across the ocean, particularly former Portuguese colonies such as Angola, During said.

Some Brazilian strategists argue that Brazil should become "the dominant naval power in the South Atlantic, without excluding others," he added.

Last year, former defense minister Nelson Jobim raised eyebrows when he described any expanded NATO presence in the South Atlantic as "inappropriate," and some Brazilian lawmakers expressed concern when the United States decided to reactivate its 4th Fleet in the area in 2008.

But During dismissed those comments "as rhetoric for domestic consumption."

French Senate's Call: Buy Reaper, Not Heron UAV

PARIS - A left-led French Senate has adopted a budgetary amendment calling for procurement of the General Atomics Reaper UAV while safeguarding funds for development of a new-generation combat drone planned as a common project with Britain, the upper house said in a statement.

The amendment seeks to reverse a government decision to acquire the Heron TP drone from Israel Aerospace Industries (IAI), partnered with Dassault Aviation.

"The Senate wanted, in the general interest, to separate the operational needs of the Armed Forces from the industrial policy considerations," the amendment text said. "With this in mind, the Senators wanted, in the short term, to put priority on the safety of our troops by giving them the best equipment at the best price, in this case, the Reaper from General Atomics, while allowing, in the medium term, the emergence of an industrial sector by setting aside a larger amount of funds for French and European companies than that envisaged in the government's industrial plan."

The amendment, adopted Nov. 29 by a Socialist-led Senate, seeks to cut the amount for UAV acquisition in the draft 2012 defense budget law from 318 million euros ($423.8 million) to 209 million.

The 209 million euros is the amount General Atomics proposed in May for a non-French modified package consisting of seven air vehicles, two ground stations and maintenance for 10 years.

Under the Reaper offer, EADS would modify the U.S.-built UAV at a cost of 40 percent of the acquisition, or 88 million euros, bringing the total value of the package to 297 million euros, the amendment said.

That compares with an offer made by Dassault and IAI, also in May, for a package of seven modified Heron TP UAVs for 320 million euros. Modifications by Dassault, mainly adapting the satellite communications and integrating extra sensors, would bring the total amount to 370 million euros, the amendment said.

The Dassault-IAI deal also included two ground stations and 10 years' maintenance, the amendment said.

The senators debated the amendment until 4 a.m., a parliamentary official said.

"It was Homeric," the official said.

But senators of both right and left voted in favor of the amendment, which pushes the government to buy the American Reaper UAV, which can be armed.

The U.S. Air Force's selection of Boeing over Airbus for its KC-X tanker program made it extremely difficult for French senators to call for the purchase of a U.S. system, the official said. But the lack of operational and industrial sense in the French government's decision to buy the Israeli drone meant the Senate adopted the amendment, he said.

Besides the cut in procurement funding, the amendment called for the move of 80 million euros into technology studies for the future Anglo-French drone, and 29 million euros for upgrades to the current Harfang medium-altitude, long-endurance UAV operating in Afghanistan.

The 80 million euros for research studies would benefit Dassault and/or EADS for work on the planned Anglo-French program, rather than IAI, the amendment said.

Although the amendment does not specify the money should go to the unmanned combat aerial vehicle (UCAV) project in the Lancaster House Treaty, that was the intention, the parliamentary official said.

The amendment pointed up concern over the lack of competition in the government's pick of the Heron TP.

"This decision to choose the Heron TP drone, with a tender, is difficult to understand: it is financially disadvantageous, militarily debatable and industrially hazardous," the amendment said.

Defense Minister Gérard Longuet told the Senate's foreign affairs and defense committee that the Heron TP was 30 percent more expensive and 20 percent less effective than the Reaper, the amendment said.

Dassault was not available for comment.

A bipartisan group from the Senate foreign affairs and defense committee drafted the amendment, which will go to a joint committee of seven senators and seven members of parliament from the National Assembly for review.

It is unlikely the joint committee will agree on the same text, and the lower house, the National Assembly, will probably carry the day, the parliamentary official said.

The Senate and National Assembly defense committees put the safety of service personnel above any political concerns, an industry source said.

India To Develop AIP Technology for Subs

NEW DELHI - Even as the Indian Navy has announced that it is floating a global tender to procure six air independent propulsion (AIP) submarines for $11 billion, Indian Defence Minister A.K. Antony told the parliament Nov. 28 that the Defence Research and Development Organisation (DRDO) is developing such technology itself.
"The DRDO proposes to develop a technology to reduce vulnerability of the submarines available with the Indian Navy. The Naval Material Research Laboratory (NMRL), Ambernath, under the Defence Research and Development Organisation (DRDO), is progressing a technology demonstration project, 'Development of Land-based Prototype for Air Independent Propulsion (AIP),' for submarine propulsion," Antony told the parliament in a written reply, according to an Indian Defence Ministry statement.

The system is likely to be demonstrated by 2015, adds the release.
Last year, the Defence Ministry cleared the plan to procure six conventional submarines with AIP technology, and the request for proposals is likely to be floated by the end of the year or early 2012.
In 2004, India contracted the licensed production of six Scorpene conventional submarines for about $3.9 billion, but the production has been delayed by almost two years.
Under the proposal, six submarines are to be procured, of which three are likely to be built at the state-owned Mazagon Docks in Mumbai; one built at the state-owned Hindustan Shipyard in Visakhapatnam, with the help of a foreign collaborator; and two purchased directly from the overseas vendor.
The six submarines are being procured under the Navy's Project-75, and the subs will be equipped with stealth, land-attack capability and the ability to incorporate future technologies, such as AIP systems, to boost their operational capabilities.
The RfP is likely to be issued to French company DCNS, Germany's HDW and Russia's Amur Design Bureau.