Phalcon export contract with India biggest ever by Israeli firm

Special to World
Monday, March 8, 2004

TEL AVIV India and Israel have signed a $1.1 billion contract for the Phalcon airborne early-warning and alert system.

The Phalcon deal represents the largest single defense export contract by an Israeli firm. Israeli Defense Ministry director-general Amos Yaron called the deal the most important breakthrough for Israel's defense industry.

The contract was signed on Friday by the state-owned Israel Aircraft Industries and the Indian Defense Ministry in New Delhi. Under the contract, IAI will deliver India three Phalcon AEW aircraft to the Indian Air Force. The platform will be the Ilyushin Il-76 sold by Russia.

"This contract was achieved after very positive efforts in the political, marketing and engineering areas," IAI president Moshe Keret said. "This contract will strengthen the bond between IAI and the Indian Ministry of Defense and Indian industry."

Executives said Russia would provide the first Il-76 aircraft in 2006 after modifying the airplane and installing new high-powered engines.

The aircraft would be manufactured at Ilyushin's facility in Uzbekistan.

India will receive the first Phalcon aircraft within 44 months of a downpayment of around $300 million by India to Israel. Nine months later the second aircraft would arrive, followed by the third after another six months. The entire project is expected to last until 2009.

Industry sources said the Phalcon deal was delayed by a dispute with Russia over the cost of the modifications of the Il-76 to accommodate the Phalcon. Under the contract, Russia's Irkut would modify the Il-76 and install new engines. Irkut has been involved in the production of the Su-30 and MiG-27 fighter-jets.

The Phalcon's early warning electronic subsystems have been designed by IAI's Elta Systems Group. The Phalcon system, said to have a range of about 500 kilometers, includes radars, electronic intelligence systems and communications equipment.

IAI executives said the Phalcon's task will include tactical surveillance of airborne targets and gathering of electronic intelligence missions. Elta has sold a less advanced AEW system to Chile's air force, which has been in service since 1995.

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