The "Turkish Daily News" reports that pressure from US companies and the cancellation of the tender for importing water from Turkey has led to the breakdown of talks between the Turkish Ministry of Defense and Israel Military Industries (IMI) for the upgrading of 170 Turkish army tanks. The deal is worth $700 million.
The report also stated that an Israeli source in Ankara said in response that while the Israeli delegation had indeed left Turkey, the reason was observance of the Sabbath, not a breakdown in talks.
The negotiations to upgrade Turkish M60 tanks have been going on for a year. IMI initially asked for $1 billion for the upgrade, but recently stated it would settle for only $700 million. The Turks announced they would be willing to pay $600 million, provided Israel committed itself to reciprocal procurement of Turkish goods amounting to at least half that price.
Israel's Ministry of Defense said more than once that it supported the purchase of water from Turkey as part of the deal. The ministry believes importing water from Turkey could help the tank upgrade deal. Israel would have paid $350 million for transporting the water, about half the cost of the tank upgrade.
Last week, the Ministry of Finance reported that it was canceling the import of water, since the two companies competing in the tender, Stena of Sweden and Greek-Turkish company Antalya, did not meet the conditions and insisted on changes. The Water Commission said that despite the canceled tender, efforts would be made to import water from Turkey by other means.
According to the "Turkish Daily News", US companies, such as General Dynamics and others, recently increased their pressure on the Turkish government to open the tender to competition, instead of making IMI the sole competitor.
In response to local criticism of the Turkish government for not opening the tender to competition, the Israeli embassy announced its willingness to give Turkey considerable technological know-how, which no other country had been willing to transfer. Furthermore, the entire upgrade would be performed in Turkey by Turkish companies.
Published by Israel's Business Arena on December 2, 2001