The planned new IDF armored personnel carrier (APC) - the Eitan - will be manufactured in the US and purchased by Israel with US military aid, according to internal discussions by the IDF land forces and the Ministry of Defense. Such a decision is liable to disappoint Israeli defense companies and dozens more small and medium-sized companies in Israel involved in the Merkava tank program. These companies hoped that their involvement in the new APC program would increase the volume of their business.
The APC, which is in the advanced stages of development by the Ministry of Defense and IDF, was first unveiled four months ago, and is in the midst of a series of tests. A prototype of the APC has already been built, and two more will be completed in the coming months.
The Nahal brigade is due to conduct a series of tests on the APC in the coming weeks. Defense sources said that the tests might be completed in the coming months, in which case the IDF and Ministry of Defense would discuss its procurement. If this occurs, procurement is likely to begin during the Gideon multi-year plan, under which the IDF is already operating.
With the unveiling of the new APC, senior defense establishment sources said that an assembly line for the vehicle could be begun within 2-3 years. The IDF wants to procure several dozen of these vehicles a year, which will make it possible to gradually replace the old M-113 Bardelas (Cheetah) APCs used by IDF infantry units. The M-113 was developed in the US in the 1960s.
The IDF currently has a large number of M-113s that are not protected against the new battlefield threats, such as advanced anti-tank missiles. The problem of protection for these vehicles was highlighted during Operation Protective Edge in the Gaza Strip in the summer of 2014. In the course of operations by Golani Brigade forces in Shejaia, an anti-tank missile was fired against an IDF M-113 APC, killing seven IDF soldiers, with Hamas obtaining part of Sergeant Oron Shaul's body.
In recent months, the defense establishment said that the price of the planned APC would be less than that of other APCs around the world, so that the IDF would be able to procure a large number of the them. The Ministry of Defense did not disclose the price, but Tank Administration Commander Brig.Gen. Baruch Matzliah previously attributed the low price to the commercial systems that would be installed in it. These systems are substantially less expensive than other systems installed in other APCs in Israel and elsewhere.
Despite its low price, the defense establishment is portraying the Eitan as one of the world's best-protected APCs, among other things due to the Trophy defense system produced by Rafael Advanced Defense Systems Ltd. This system can intercept advanced RPG rockets and anti-tank missiles. The Trophy has already been installed in the IDF's Mark IV Merkava tanks and Namer APCs.
Far more involved
One of the considerations affecting the Ministry of Defense's decision to outsource production of the future APC to the US, instead of producing it in Israel, is US aid money. Israel prefers to have production in the US, after which it can be imported. The various systems to be installed in Israel will all be produced by Israeli defense industries.
The change in the military aid agreement with the US signed last September is also a major consideration in the looming decision. Under the new agreement, the US will grant Israel $3.8 billion in military aid a year. In contrast to the previous aid agreement, however, starting seven years from now, Israel will not be allowed to convert 25% of the aid in dollars to shekels and use it for purchases from local defense companies. The Ministry of Defense previously outsourced the Namer APC for production in the US, so that it could be procured with US aid money.
60% of the Namer is made in the US, including the chasses and other components. The Namer is assembled in the IDF and Ministry of Defense Reconstruction and Center. The leading contractor in the production of the Namer components in the US is General Dynamics. Dozens more US companies are also involved in the program. In the case of the Eitan APC, involvement by US industry is expected to be greater than in the Namer project.
Although Israeli companies are likely to be disappointed by the emerging decision, a defense source involved in the program told "Globes" that dozens of Mark IV tanks were currently being manufactured annually in Israel, as well as speeded-up production of the Namer.
"This is the most intensive production of APCs and tanks that has ever taken place in Israel. The industries involved in these programs will obviously receive orders accordingly," the source said.
In recent weeks, the Ministry of Defense reported that it had ordered hundreds of Trophy systems from Rafael, amounting to hundreds of millions of shekels. These systems will be used to protect the Namer APCs. Procurement of the Namer was stepped up as a result of the lessons learned from Operation Protective Edge.
The Ministry of Defense said in response, "The Eitan is still in the development stages, and has not yet been approved by the IDF for procurement and mass production. If and when decisions are taken to produce it, and in what volume, the Ministry of Defense Merkava Tank Administration, which regards the involvement of Israeli industries in the Merkava project as a strategic asset, will take steps to ensure the share of Israeli industries in the project, as it has done up until now. We emphasize that after the project is approved, production of the Eitan will take place simultaneously with production of the Merkava and Namer. In view of the increased procurement of armored fighting vehicles following Operation Protective Edge, the Israeli defense industries' share of all these projects will increase, not decrease."
Published by Globes [online], Israel business news - www.globes-online.com - on December 4, 2016
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