The IDF artillery and infantry corps will be equipped in the coming years with precise rockets, missiles and shells made by Israel Military Industries Ltd. (IMI Systems), at a cost of NIS 1.75 billion. The Ministry of Defense today announced that a multi-year agreement had been signed by its Production and Procurement Directorate to purchase NIS 250 million a year in various types of ammunition from IMI Systems.
The Ministry of Defense said that the program for large-scale procurement of different types of ammunition from IMI would enable the IDF to renew its inventory, following Operation Protective Edge more than two years ago, and would support the training plan for our forces over the coming decade. Some of the IDF training program is already covered by the Gideon multi-year plan.
In addition to the procurement needs of IDF units for training and preparation for a future military conflict, the Ministry of Defense also regards the new order as a lever for carrying out past government decisions on moving IDF Systems from Ramat Hasharon to Ramat Beka in the Negev by 2022.
IMI has been undergoing a long privatization process, and the state has published a tender for its sale. At the same time, the only company to reach the last hurdle in the sale of the government-owned company is Elbit Systems Ltd. (Nasdaq: ESLT; TASE: ESLT). The tender for the company's sale has been stalled for many months, among other things because of criticism by State Comptroller Judge (ret.) Joseph Shapira of how the Government Companies Authority, headed by Ori Yogev and the Ministry of Finance conducted the IMI privatization processes.
The Ministry of Defense said that the fact that the ammunition order was ordered from IMI in the framework of a multi-year plan extending until 2025 would produce a good economic incentive for future owners of the company to move its production to Ramat Beka, in the spirit of the cabinet decision on the matter. The Ministry of Finance added, "The Procurement Directorate insisted that the agreement extend until 2025, three years after the planned move to the south, for the purpose of further reinforcing the economic benefit in the move."
Production and Procurement Directorate head Brigadier-General (res.) Shmuel Zucker said, "The agreement guarantees ammunition inventory for IDF field units for a decade ahead, and on the other hand will provide jobs for thousands of workers, while supporting the transfer of the company's plants to the Negev and making it possible to construct thousands of housing units in central Israel." Zucker was referring to the vacating of expensive land in Ramat Hasharon occupied by IMI, which will allow residential construction there.
Commenting on the deal, IMI CEO Avi Felder said, "The deal reflects the great confidence of the Ministry of Defense and the IDF in the company's weapon systems, which have been proven in use in battlefield operations."
Neither IMI nor the Ministry of Defense specified the types of ammunition in the multi-year procurement agreement. Nevertheless, defense sources said that a variety of precise rockets and shells developed by the company over the past decade were involved. These weapons include the Kidon Kasoum (Magic Spear) and Romach guided rockets, which make possible accurate strikes against targets located in the heart of urban territory at a range of 35-40 kilometers. Another, heavier, rocket is the EXTRA, designed to hit targets at a range of 150 kilometers. The payload carried this rocket was previously estimated at 120 kilos.
In addition to these guided and precise rockets, some of which are already in operational use in various IDF units, IMI has developed in recent years an accurate mortar shell and the Hatzav artillery shell. The IDF made extensive use of this shell in Operation Protective Edge in the Gaza Strip.
Published by Globes [online], Israel business news - www.globes-online.com - on January 1, 2017
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