Syria war may bring Saudi deal for Altay

Burak BEKDİL ANKARA - Hürriyet Daily News

Ankara could augment its alliance with Riyadh against Tehran by adding a defense industry dimension through the sale of Altays. DAILY NEWS photo / Emrah GÜREL

Turkish arms makers and defense officials are expecting to win more contracts from the Sunni bloc of countries, spearheaded by Saudi Arabia, as political solidarity with Turkey over the Syrian civil war deepens and could pave the way for “preferential treatment” in defense deals.

“The Sunni bloc now actively engaged in efforts to oust [Syrian President Bashar] al-Assad have been good clients for Turkey’s weapons industry. Now there are indications that their political alliance with Ankara may facilitate bigger contracts,” said one top defense industry official.

An executive from a Turkish armored vehicles manufacturer said that reinforced alliances with some of the Gulf countries over the Syrian crisis have already indicated that new contracts could be in the offing for the Turkish arms industry. “I can say that we are more warmly welcomed in certain [Gulf] capitals than before. Our counterparts have made it clear that almost excellent political relations their countries have with Turkey could soon turn into new business opportunities for Turkish defense companies,” he said.

In 2012, Saudi Arabia was Turkey’s third largest defense industry customer, with Turkish exports valued at $99 million, or 7.8 percent of Turkey’s entire defense and aerospace exports worth $1.262 billion. Turkish defense exports to the United Arab Emirates totaled $101 million, and to the Shia-majority but Sunni-ruled Bahrain $91 million in the same year. The three Gulf countries altogether accounted for nearly a quarter of Turkey’s all defense exports in 2012.

Officials said Turkish armored vehicles maker Otokar, a subsidiary of Koç Holding, could sell to Saudi Arabia hundreds of the Altay, the third generation tank it is currently developing.

A source at the defense procurement agency, the Undersecretariat for Defense Industries (SSM), said a Saudi order for the Altay in the near future was “quite probable.”

“The Altay is not available for immediate sale, but is potentially a powerful export product when you think of a medium-term deal. Saudis are good customers with available cash, good political ties and their need for new tanks. We are hopeful about a future deal [for the Altay],” the official said.

Saudi Arabia has 320 elderly AMX-30 French tanks in need of replacement. Saudi Arabia and Turkey, along with Qatar, are spearheading efforts to oust Syria’s President Bashar al-Assad. Turkey, Saudi Arabia and Qatar support rebel forces fighting al-Assad’s army in a civil war that has taken nearly 100,000 lives in two years. “Adding a defense industry dimension to their ties would augment the Turkish-Saudi alliance against Iran,” said a western military attaché here.

Turkey and Saudi Arabia reiterated their common understanding on the civil war in Syria, during a visit by Saudi Crown Prince Salman bin Abdulaziz to Ankara May 21. Following his talks with President Abdullah Gul, Salman met with Prime Minister Recep Tayyip Erdoğan and Foreign Minister Ahmet Davutoglu May 22. “We fully agree on the urgent need to stop the bloodshed in Syria. We also agree that our efforts for peace there should be coordinated. It was a useful wrap up [meeting] ahead of the Geneva conference,” a Turkish diplomat said.

Koç Holding’s Otokar designed and is producing prototypes of the Altay in a deal to sell in four tranches of 250 units each to the Turkish military. The Turkish Army currently has in its inventory 720 German-made Leopard 1 and 2 tanks, 930 American M-60s and 1,370 M-48s, most of which are Cold War era tanks and need replacement.

Defense industry sources said that Otokar’s rival in any Saudi tank deal could be the French Leclerc. Earlier, France proposed replacing Saudi Arabia’s French-made AMX-30s with the AMX-56 Leclerc. However, sources say the 65-ton Altay would better meet the Saudi requirement than the 55-ton Leclerc. The Altay is similar in many ways to the 400 M1 tanks the Saudis have (in service or on order): both have a 120mm gun, composite armor, and high-end electronics.

Last November, Otokar unveiled the Altay with top government officials promising that the program would be completed “one or two years” ahead of time. In 2008, Otokar signed a $500 million contract with the country’s procurement office, the Undersecretariat for Defense Industries. Under the deal, Otokar will finish building four prototypes of the Altay this year, two years ahead of the original schedule. The four prototypes will undergo performance tests throughout 2013.

The SSM selected South Korea’s Hyundai Rotem for the overall technical support. Turkey’s Aselsan was chosen as the Fire Control System and Command, Control and Communications Information system subcontractor. Also the state-owned MKEK was selected as the subcontractor for the 120mm primary weapon and Roketsan was tasked with the job of providing the armor.

Procurement officials say that the serial-production agreement for the Altay would be effective probably in 2017, together with the expected foreign orders.

Otokar also produces several other armored vehicles, the most known of which is Cobra, a 4X4 vehicle, used for reconnaissance and area control purposes by the Turkish security forces and the armies of several other countries. Earlier this month, Otokar revealed its first tracked armored tactical vehicle, the Tulpar.