November 13, 2013
U.S. arms makers Raytheon Co and Lockheed Martin Corp are considering ways to sweeten their offer to build a Patriot missile defense system for Turkey after Ankara said it could still back away from a provisional $3.4 billion deal with China, sources familiar with the issue said on Tuesday.
“There are internal discussions going on about improving the Patriot offer,” said one source, who is familiar with the talks but not authorized to speak publicly.
A second source confirmed that preliminary discussions were under way within industry and the U.S. government about how the offer could be adjusted to be more competitive with bids submitted by the Chinese firm, and a European group.
Both sources said no decisions had been made and it was important to allow Turkey - a member of NATO - time to make up its mind.
Turkey announced in September it had chosen China’s FD-2000 long-range air and missile defense system against rival offers from Franco/Italian Eurosam SAMP/T and Raytheon.
It said China offered the most competitive terms and would allow co-production in Turkey, but the decision caused alarm in NATO countries worried about China’s growing clout.
Secretary of State John Kerry and other U.S. government officials raised concerns after Ankara’s choice of the missile defense system built by China Precision Machinery Import and Export Corp, a firm that is under U.S. sanctions for violating the Iran, North Korea and Syria Nonproliferation Act.
“We continue to convey our serious concerns about the Turkish government’s contract discussions with a Chinese company - which is currently sanctioned by the United States - for an air and missile defense system that will not be inter-operable with NATO systems or collective defense capabilities,” said one State Department official.
State Department officials said Kerry had expressed his concerns to Turkish Foreign Minister Ahmet Davutoglu in New York, and Assistant Secretary of State Victoria Nuland, who oversees European and Eurasian affairs, has discussed the issue with senior Turkish officials.