Israel, Russia team up to help India

TEL AVIV -- Israel and Russia have again joined forces to compete for a major defense project -- this time in India.

Israel's Soltam Ltd., based in Yokneam, has teamed with Urals Transmash in Russia to compete for an Indian bid to supply and produce self-propelled artillery for the Indian army. The contract is estimated at $500 million in the first stage.

Defense sources said India benefited from both Israeli and Russian help during New Dehli's border war with Pakistan in Kargil. The Indians have seen similar models of the Israeli artillery and might have tested the systems over the last few months, the sources said

"The war was an opportunity to learn who Indian friends are and both Russia and Israel were there," a defense source said.

The Israeli-Russian consortium faces stiff competition from Britain, Germany, South African and U.S. companies. All are offering NATO standard 155 mm artillery.

The joint effort is the third time Israeli and Russian firms are cooperating to win an international bid. Israel and Russian firms are working in China for the Ring airborne early warning system as well as competing for the $4 billion contract to produce helicopters in Turkey.

Under the terms of the Indian project, New Dehli plans to launch a procurement program of $500 million for up to 200 self-propelled artillery pieces. In the next stage, India will coproduce the artillery.

Defense sources the Indian project brings together Israeli technology and Russian engineering. Soltam is offering a self-propelled gun howitzer based on the Slammer, a model rejected by the Israeli army for lack of funds. The artillery has a range of 40 kilometers and its cannon can be elevated up to 82 degrees.

The sources said this artillery makes it ideal for use in India's high-altitude Kargil area, where India and Pakistan fought an intense border war over the summer. They said the surprise infiltration of hundreds of Pakistani irregulars in Kargil pointed to the need for modern systems and more funds for New Dehli's defense budget.

Indian officials maintain that the government has approved a larger defense budget. "There is a realization that we need more money to bolster conventional defenses," an Indian defense official said.

The Soltam artillery is to be placed on the chassis of a T-72 tank, a staple of the Indian army. The chassis will contain a new Russian designed turret.

Industry sources said the formation of the Israeli-Russian consortium was delayed because of a dispute over profit-sharing. They said Soltam wanted the split to be even. In the end, the sources said, the Israeli company agreed to about a quarter of the revenues.