Gov't to allocate NIS 30b for air missile defense expansion

Iron Dome photo: Shaul Golan

The new program is likely to benefit IAI and Rafael, which are developing missile defense systems.

The Ministry of Finance today announced that at its upcoming meeting early next week, the government was likely to approve a multi-year plan bolstering and expanding the IDF's air defense system. The NIS 30 billion program will be spread over 2019-2028.

Israel's air missile defense system is based on the Iron Dome (for intercepting short-range threats), David's Sling (for intercepting medium-range rockets and missiles), and the Arrow and Arrow 3 systems (for intercepting ballistic missiles threatening the Israeli home front).

The new program is likely to benefit Israel Aerospace Industries Ltd. (IAI) (TASE: ARSP.B1) and Rafael Advanced Defense Systems Ltd., the government companies developing and producing the air defense systems and the radar systems on which they are based.

In effect, this program grants Minister of Defense Avigdor Liberman's demand in recent months that the Ministry of Defense be compensated for the ongoing erosion in the IDF' Gideon multi-year plan. This multi-year plan was set when the minister of defense was Moshe Ya'alon, who signed an agreement with Minister of Finance Moshe Kahlon under which the Ministry of Defense was to have functioned for five years. Liberman argued that despite this agreement, changes in the Middle East had forced the IDF to make over NIS 8 billion in unplanned spending. He demanded that the Ministry of Finance compensate the defense budget for these costs.

At the same time, the Ministry of Defense is denying the report. A senior Ministry of Defense source told "Globes," "It is all election campaign gimmicks. No serious discussion has taken place and there are no agreements. It is all based on gossip. As of now, NIS 8.3 billion has been cut from the defense budget."

Published by Globes [online], Israel business news - www.globes-online.com - on July 24, 2018

© Copyright of Globes Publisher Itonut (1983) Ltd. 2018

Iron Dome photo: Shaul Golan
Iron Dome photo: Shaul Golan
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