TEL AVIV Ñ China has agreed to purchase two civilian Israeli
communications satellites as part of a compensation package for the
cancellation of the Phalcon airborne early-warning system.
The two countries have signed an initial agreement for the Chinese
purchase of two Amos high-power communications satellites, which will
contain
multiple transponders in a deal estimated at $250 million. The facility will
be larger than the Amos-2 satellite Israel plans to launch in 2007.
The Amos HP will be manufactured by the state-owned Israel Aircraft
Industries and completed by 2008. Israeli industry sources said the
satellites will be purely civilian and used for the 2008 Olympic Games in
Beijing.
On Wednesday, an Israeli delegation led by Communications Minister
Reuven Rivlin left for Beijing to sign a full accord. Officials said the
signing demonstrates continued trade relations between Israel and China
despite the Phalcon crisis.
Industry sources said the satellite deal is meant to serve as
compensation for Israel's cancellation of the Phalcon sale to China. They said China
wants more than $1 billion in compensation for the Phalcon.
The industry sources said the satellite deal remains uncertain. One
question is whether the United States will allow Israel to sell a civilian
satellite to China. A bigger question is whether European space companies
will be granted the export licenses to sell key components for the Amos.
IAI has used such European companies as France's Alcatel and Astrium for
key systems, such as the guidance mechanism, of the Amos. Amos-1 was
launched in 1996.
"It seems to me that this will mark compensation but things are far from
being concluded," a senior industry source said. "Otherwise, China would
have no real interest in an Israeli communications satellite."
Beijing plans to launch the satellite on either a Chinese or Russian
booster. The satellite will be placed into orbit at an altitude of 36,000
kilometers.
The negotiations for the Israeli satellite began more than a year ago,
after Israel suspended the Phalcon sale in July 2000. A team from IAI's MBT
division concluded an initial deal in December, the sources said.
