Egypt to use U.S. aid to buy European subs

WASHINGTON — Egypt is moving toward obtaining Bush administration support to use U.S. military aid for the purchase of two European-designed submarines.

Officials said the issue will soon be presented to the administration for final approval of a proposal to allow Egypt to use U.S. military aid for the submarine purchase, Middle East Newsline reported. The proposal has already been approved by a key Pentagon agency.

If approved by the administration, it would be the first time that the United States will finance the construction of a non-American submarine for a foreign ally. Officials said the Pentagon aims to complete the deal by July.

The United States has not made diesel-powered attack submarines for decades and the navy has not operated one since 1990. Instead, the U.S. Navy operates only nuclear-powered subs.

In September, Egypt signed a letter of intent with a U.S.-European consortium for the construction of two Dutch Moray-class submarines. In a formula designed to win U.S. aid, the submarines will be constructed at the Ingalls Shipyard in Mississippi.

Ingalls is the prime contractor. The two other partners in the consortium are RDM Submarines, the Dutch company that produces the Moray, and Lockheed Martin, which will produce the combat systems.

Officials said Egypt — which was first considering Russian submarines -- asked Washington for a waiver that would allow the use of annual military aid to purchase the submarines. Several months ago, the waiver was approved in principle by the Defense Security Cooperation Agency.

Egypt receives $1.3 billion in annual U.S. military aid. Egyptian Defense Minister Hussein Tantawi held talks in Cairo this week with a visiting U.S. House subcommittee delegation to increase the military aid.

Officials said they expect the Bush administration to grant final approval of the waiver. They said the move would allow Cairo to significantly bolster its navy and demonstrate Washington's support for Egypt's role in Middle East security.