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Tuesday, October 26, 2010     GET REAL

As Turkey-Israel ties encounter turbulence, contractors file suit

ANKARA — A leading Turkish company has sued Israeli contractors over the modernization of the M-60A3 main battle tank for the Turkish military.


Turkey's Yilmazlar Construction took legal action against companies in Israel and Turkey involved in the $688 million M-60 upgrade project. Yilmazlar said the state-owned Israel Military Industries had violated the MBT contract.

The company also cited the anti-Israel rhetoric by the Turkish government for a decline in trade relations.

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"Our company has been active in Israel for the past 16 years," Yilmazlar general manager Ahmet Aruk said. "The Turkish state has faced various losses in tenders won by Israel as Turkey was not able to adequately protect its interests."

Executives said Yilmazlar has sought $200 million from IMI for breach of the M-60 contract, Middle East Newsline reported. The Turkish company said an Israeli court froze $10 million worth of accounts in June 2010.

"We are demanding $200 million in compensation," Yilmazlar said. "This is a first in Turkish foreign trade history and represents a demand for justice in projects that have put the Turkish nation at a loss."

Aruk said IMI was blocking Turkish offsets connected to the M-60 project, which ended in April 2010. He said IMI and the Israeli government had pledged that Yilmazlar and 800 Turkish workers could carry out construction projects in Israel until 2015.

"IMI is obstructing the number of Turkish workers and their working period in this project, against the interests of our company and Turkey," Aruk said. "It has been manipulating and violating the conditions of its contract with the Turkish Defense Undersecretariat."

Yilmazlar has also sued Israel for taxes taken from Turkish construction workers.

"We have also decided to carry to justice the projects that have been awarded to Israel in the past 15 years and resulted in losses for the Turkish economy, particularly in defense," Aruk said. "Furthermore, the Turkish Defense Undersecretariat, the related ministry and individuals responsible for losses in the M-60 tank modernization project will be taken to court in Ankara."

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