Iceland angers fishing industry by pressing ahead with EU regulation
Iceland’s new government is to submit a formal application for European Union membership on July 27th – potentially putting itself on collision course with the country’s fish catching industry. The prime minister Johanna Sigurdardottir, and many members of her party see membership as the only way of returning the country to financial stability after last October’s disastrous meltdown that has devastated the economy.
But the move is being strongly opposed by Iceland’s trawler owners federation who fear that it will open their fishing grounds to plunder from powerful fishing nations like Spain and France. Up to now Iceland’s grounds are largely fished by Icelandic vessels and are controlled by strict quotas, monitored by the Marine Research Institute which usually recommends catch limits.
Only one or two neighbouring states like the Faroe Islands have some limited access.
Recently a small group of British MPs have been in Iceland warning the country not to rush in, pointing out that membership had devastated much of the UK catching industry.
EU officials have said an Icelandic application would probably be looked on favourably by member states and that negotiations could move quickly due to the country’s already strong ties to the bloc. But many observers feel that the EU has envious eyes on Iceland rich fishing and energy reserves (there are strong indications of oil reserves in the region).
The bad news for the fishing industry is that a recent poll showed 61 per cent of Icelanders are in favour of opening accession talks.
Marine Microorganisms: Survived Mass Extinction By Leading A Double Life
Drifting across the world’s oceans are a group of unicellular marine microorganisms that are not only a crucial source of food for other marine life — but their fossils, which are found in abundance, provide scientists with an extraordinary record of climatic change and other major events in the history of the earth.
Now, planktonic foraminifera — single-celled shell building members of the marine microplankton community — have given up a secret of their very own.
A team of experts have presented remarkable evidence that planktonic foraminifera may have survived mass extinction by taking refuge on the sea floor. Dr Chris Wade from the Institute of Genetics, said: “Using genetic data we have been able to prove that the planktonic species Streptochilus globigerus and the benthic — sediment living — foraminiferan Bolivina variabilis are one and the same biological species. Moreover, geochemical evidence shows that this species actively grows within the open-ocean surface waters, thus occupying both planktonic and benthic domains. Such ecologically-flexible species are eminently suited to the recolonisation of the extinction-susceptible planktonic domain following mass extinctions events, such as the end-Cretaceous event.”
It had been thought that all modern planktic foraminifers were descended from the few lucky survivors of the meteor impact that wiped out the dinosaurs and 65 to 70 per cent of life on earth 65 million years ago. However, this might not be the case.
Dr Wade has shown that live specimens of the planktonic species Streptochilus globigerus, collected 600 miles offshore in the middle of the Arabian Sea, are genetically identical to the benthic species Bolivina variabilis, found off the coast of Kenya.
Their surprising discovery suggests that planktonic foraminifera may have survived the end Cretaceous mass-extinction by abandoning the poisonous oceans for a refuge in the relative safety of the sea-floor. When the oceans returned to normal, the survivors were able to recolonise the ocean surface once more.
The research, carried out in collaboration with the University of Edinburgh, has been published in the journal Proceedings of the National Academy of Sciences (PNAS). Dr Kate Darling, from the University of Edinburgh, said: “If some species can switch between free-swimming and bottom-dwelling lifestyles, then it’s possible that most planktic foraminifers may have survived the late Cretaceous extinction in the sediment, not in the plankton. It seems likely that the foraminifer species which had the ability to occupy both habitats survived on the sea-floor, avoiding the meteor impact catastrophe in the oceans above.
Keel to Be Laid for Third Littoral Combat Ship
Lockheed prepares to lay the keel of LCS 3 as General Dynamics completes builder’s trials of trimaran-hulled LCS 2 Independence (above). (US Navy photo)
The keel for the future littoral combat ship, USS Fort Worth (LCS 3), was laid July 11 during a ceremony at Marinette Marine Shipyard in Marinette, Wisconsin.
Keel-laying has traditionally been the first step in ship construction, when shipbuilders laid down the lengthwise timber that would become the ship’s backbone.
During the scheduled event, a shipyard welder will attach the future ship’s plaque to the keel, and U.S. Rep. Kay Granger will confirm that the keel was laid “straight and true.”
“Starting construction on the third ship is an exciting milestone to reach,” said Capt. Jim Murdoch, LCS program manager within the Navy’s Program Executive Office, Ships.
“Reaching the Navy’s goal of a 55-ship class depends on getting LCS into serial production, which will lead to high quality ships being delivered to the fleet on cost and on schedule.”
LCS is a new breed of U.S. Navy warship, capable of open-ocean operation but optimized for littoral or coastal missions. Operational experience and analyses indicate that potential adversaries will employ asymmetric means to deny U.S. and allied forces access into critical coastal regions, such as strategic chokepoints and vital economic sea lanes. LCS is specifically designed to defeat such “anti-access” threats, which include fast surface craft, quiet diesel submarines and various types of mines.
Fort Worth is expected to be delivered to the Navy in 2012, when she will join sister ships USS Freedom (LCS 1) and USS Independence (LCS 2). Freedom was commissioned by the Navy in November 2008. Independence is currently undergoing builder’s sea trials in the Gulf of Mexico and is scheduled to be delivered to the Navy later this year. A contract was awarded to General Dynamics-Bath Iron Works in May for the construction of LCS 4, the future USS Coronado.
The future USS Fort Worth, named in honour of the Texas city, will be 378 feet in length, have a waterline beam of 57 feet, displace approximately 3,000 tons and will make speed in excess of 40 knots.
Russia may sell up to 40 diesel submarines by 2015
According to a recent report by RIA Novosti, Russia could sell up to 40 fourth-generation diesel-electric submarines to foreign customers by 2015 via state-run arms exporter Rosoboronexport.
“Russia’s export potential in this market sector is very high thanks to Project 636 and Amur-1650 class submarines equipped with the Club-S integrated missile systems,” Rosoboronexport said in a press release. The Project 636 Kilo-class submarine is thought to be one of the most silent submarine classes in the world. It has been specifically designed for anti-shipping and anti-submarine operations in relatively shallow waters.
Russia has built Kilo-class submarines for India, China and Iran. The Project-677, or Lada-class, diesel submarine, whose export version is known as the Amur 1650, features a new anti-sonar coating for its hull, an extended cruising range, and advanced anti-ship and anti-submarine weaponry. Both submarines are equipped with highly-acclaimed Club-S integrated missile systems.
The Club-S submarine cruise missile family includes the 3M-54E1 anti-ship missile and the 3M-14E land-attack versions, with a flight range of 275km (about 170 miles). The missile can be launched from standard torpedo tubes from a depth of 35 to 40 meters (130 feet).
Overall, naval equipment constitutes about 10% of the total portfolio of orders of Rosoboronexport, which is estimated at about $30 billion. “By 2010, the share of naval equipment in Russia’s arms exports will reach 15%, and by 2011 it will total 20%,” said Oleg Azizov, head of Rosoboronexport’s delegation at the International Naval Show-2009 in St. Petersburg.
India, China, Algeria, Vietnam and Indonesia remain key buyers of Russia’s naval armaments. India and China have purchased submarines, frigates and destroyers. Vietnam has ordered Svetlyak-class fast attack boats and frigates, while Indonesia will receive corvettes built in Russia in cooperation with Spanish firms.
Carrier announces big restructuring
Eimskip, one of two major seaborne carriers taking fish from Iceland to Britain and Europe, has announced a major financial shake-up to pull the company around. Eimskip has been struggling over the past year, hit by Iceland’s financial collapse and some failed acquisitions. Just two weeks ago it announced a second quarter loss of around C$480 million, making the need for a shake up all the more urgent.
The company said the objective of the reorganisation was to maximise the returns to creditors, ensure the continuation of the Icelandic and North Atlantic operations and maintain around 1,500 jobs. An initial step in the re-organisation was to safeguard the Icelandic business by transferring certain operations to Eimskip Island ehf, a wholly owned subsidiary of the parent company. It is also getting out of its global cold storage business and reducing fleet capacity by selling three ships to Norway. It also invited the UK investment group Yucapia to take a financial stake in the business.
Eimskip stressed that the day-to-day operations of its core North Atlantic container shipping and refrigerated logistics (including fish) and payments to trade suppliers will be unaffected.
Eimskip president and chief executive Gylfi Sigfusson, said the main goal will be continue to provide service in Iceland, the North Atlantic, the Faroe Islands and Norway.
Manufacture of Royal Navy’s New Carriers Begins
Earlier this week, construction began on the Royal Navy’s new aircraft carriers, with Her Royal Highness The Princess Royal performing the initial steel-cutting for the first of the ships.
The steel-cutting ceremony took place at BVT Surface Fleet’s shipyard in Govan, on Tuesday 7 July 2009.
The Queen Elizabeth (QE) Class carriers, together with the Joint Strike Fighter aircraft and the brand new Type 45 destroyers, will form the cornerstone of Britain’s future ability to jointly project airpower worldwide from land or sea at a time and place of the UK’s choosing.
Minister for Defence Equipment and Support Quentin Davies said:
“The MOD is committed to ensuring the UK’s Armed Forces are modern, versatile and well equipped for present and future operations. The versatility of the design together with the long service life of these ships will ensure that we will be able to deal with the uncertainties of the future for years to come, and they will deliver the support to deployed UK forces around the globe.
“It is an honour to mark this historic moment with Her Royal Highness here in Govan. We also must not forget the ongoing work of legions of people in industry in regions across the country who are all delivering vital elements of this truly national project.”
First Sea Lord Admiral Sir Jonathon Band said:
“The QE Class, together with the supporting aircraft forming the Carrier Strike, represent a step change in Defence’s capability, enabling Britain to deliver airpower from the sea wherever and whenever it is required. This strategic effect, influence and, where necessary, direct action will give us an unprecedented range of options to deal with the challenges of an uncertain world at a time and place of our choosing.
“These ships are not just spare airfields, they are an instrument of national power: the ‘big stick’ which can be waved by the Government in areas of strategic interest to influence, coerce and deter.”
An Interview with Oskar Axelsson
Marport’s Executive VP and General Manager, Commercial Fisheries
During a recent visit to Seattle, we had the opportunity to catch up with Oskar and ask him a few questions concerning Marport’s acquisition of C-Tech and how he thinks it will impact the company’s activities in the Commercial Fisheries sector.
Webmaster: Good morning, and thanks for taking the time to chat with us today.
Oskar: Good morning to you. It’s my pleasure.
Webmaster: Perhaps we can start by asking what you think about Marport’s recent acquisition of C-Tech Ltd.?
Oskar: I think this is an excellent acquisition for Marport. While Commercial Fisheries is and will remain very important to us, we plan to continue with the diversification of our Software Defined Sonar® technology into new domains – including Underwater Defence, Offshore Energy and Ocean Science. Over the past 12 years, Marport has grown from a one person, one product company, to a global company with over 110 employees and nearly 100 different products. By my estimation, we now rank in the Top 5 multi-domain sonar companies in the world.
Webmaster: Have you had any involvement with C-Tech prior to the acquisition?
Oskar: Yes, as a matter of fact I’ve known C-Tech from the time that they made sonars for the commercial fishing market – this would be around the late 1970’s. During this period, I was working as a marine electronics service technician on the east coast of Iceland. I recall being very impressed with C-Tech’s sonar technology. They were the first in the world to build omni sonars that integrated micro-processors and an electronic display – while their competitors of that time were only searchlight sonars that used paper recorders. There’s no doubt that C-Tech led the commercial fisheries omni sonar market in innovation and product excellence. I think it was a very unfortunate setback for commercial fisheries when C-Tech decided to exit the industry because of the unethical copying of its products. Of course, C-Tech went on to create and build a very successful business in the military sonar market.
Webmaster: Do you see any role for C-Tech in future products for commercial fisheries?
Oskar: Definitely. We acquired C-Tech for several important reasons – the ability to quickly enter the underwater defence industry, as well as to leverage the synergies in our technology and product platforms. As many of your readers know, Marport has been making significant R&D investments in developing our Software Defined Sonar® technology. We have already successfully launched the industry’s first software defined sensors and will be releasing the 2nd generation of this technology – codenamed DataSquid® – later this year.
During the upcoming World Fishing Exhibition in Vigo, we also plan to release CARUSO, our new multi-beam sounder/profiler. CARUSO is another excellent example of broadband, software-defined technology and we expect it to be very successful. We already have orders for over 25 units – and while the hardware is ready we have decided to take some more time to finalize the software.
CARUSO will operate on what we call CommandView 4 – a 4D software application. We’ve been doing a lot of research into medical imaging techniques and believe that CARUSO will be the first of a new series of marine products that embody our trademark – Seeing with Sound®.
This means that sounder and sonar visualization techniques will migrate from the “look and feel” of standard echograms – that the fishing industry has seen for decades – to a graphically rich, real-world environment that uses acoustic imaging for picture-centric situational awareness. We’re really breaking new ground with this type of software – and we expect that the CV4 software architecture will enable us to rapidly deploy new solutions in all our market domains.
Regarding C-Tech, we are also very seriously considering re-packaging C-Tech’s existing Omni Sonar® products for re-entry into commercial fisheries market. When married with our Software Defined Sonar® electronics we could deliver a very innovative Integrated Sonar System.
Webmaster: What exactly is an Integrated Sonar System?
Oskar: Our thinking on this is quite clear. We know that we now have the technology, production capability, build quality and service/support infrastructure to immediately enter and compete with the existing omni sonars from Norway and Japan. However, competing on the same old playing field is not very compelling or interesting – we believe we need to incorporate break-through innovation that enables our customers to significantly enhance their performance and increase their operational effectiveness. To that point, in this month’s edition of Fishing News International there was a news story on the new F/V Nordborg – perhaps the world’s most advanced fishing vessel. In that article, Captain Jon Rasmussen discussed testing new gear and sharing innovative ideas with us. Innovation is a Marport hallmark and we want to continue this tradition.
As such, the Integrated Sonar Suite incorporates every acoustic element needed for Commercial Fishing – wireless net sensors and sounders, trawl mounted sonars, single and split beam hull mounted sounders, doppler current profilers and omni sonars – and all elements are seamlessly linked via an open architecture network. Marport would be the first in the industry to eliminate single function “stovepipe” marine electronics design and deliver a truly integrated system for deep sea and coastal fishing.
Webmaster: So what’s missing from your product line-up to deliver the Integrated Sonar System?
Oskar: We expect to have every component in place within the next 6 – 8 months. As I mentioned earlier, we have significant expertise in reconfigurable embedded systems – such as our broadband, software defined net sensors. We already have a series of wireless net sounders. With the C-Tech acquisition we now have significant expertise and capabilities in omni sonar. Later this year we will start shipping CARUSO our multibeam sounder/profiler.
Products currently under development include two new trawl sonars – one is a high frequency omni, while the other is a high resolution side scan imaging sonar based upon our AquaPix® technology. Both of these products are compact, phased array sonars and do not have any moving parts. We expect them to be very well received in the market.
Webmaster: Do you have any other new Commercial Fishing products under development?
Oskar: We always have new products under development (laughs). Seriously though, in addition to the two new trawl sonars, our engineers are working hard on a new speed sensor that uses doppler velocity profiling to replace electro-magnetic techniques. We also have ongoing R&D in high speed underwater wireless acoustic communications and trawl positioning technologies. I’d also like to say that we always encourage customer feedback to our existing product designs and try to incorporate that feedback whenever possible. Essentially, we build industrial tools for professional industrial customers. While some others in the commercial fishing industry want to continue to build single function devices – and then lecture customers on how to use them – we have taken a more open business approach to let our customers know the various ways that a product can be used. For example, if you make and sell hammers, you don’t need to tell a professional carpenter how to use it (smile).
Webmaster: That all sounds like very interesting business approach and technology. What are your plans regarding production for Commercial Fisheries products?
Oskar: Good question. Today, we have assembly operations in France and Seattle. And that has worked very well for us over the past few years. However, our sales in Commercial Fisheries are significantly increasing and with this sales growth we face production challenges. So our plan is to transfer final assembly of most of our Commercial Fisheries products to C-Tech’s facility in Canada. That 40,000 square foot facility is ISO 9001:2000 certified and can easily scale production to meet our needs. The plant has very impressive onsite testing capabilities as well as an offsite Underwater Acoustic Test Range with quiet water for testing acoustic sensors, sounders and sonars.
Webmaster: We have many more questions for you – but also realize that you are a busy man. So, we’ll conclude our interview and say thanks so much for spending some time with us today.
Oskar: No problem, it was my pleasure. I would also like to take this opportunity to thank our customers for their continued encouragement and support – particularly the deep sea captains, fleet managers and owners who contribute their valuable time to test and provide important feedback on the development of our new products. We consider them as part of the Marport team and it with their input we will continue to innovate.
NOAA Researchers Survey Mid-Atlantic Ridge
An international team of researchers is surveying the Mid-Atlantic Ridge halfway between Iceland and the Azores to determine its biodiversity and search for new species and clues to deep-sea food webs. The project is part of a 16-nation effort to determine if the underwater mountain chain in the middle of the North Atlantic Ocean has its own distinct animal communities. The research team is working aboard the 208-foot NOAA ship Henry B. Bigelow for six weeks as part of the Mid-Atlantic Ridge Ecosystem Project, or MAR-ECO.
The MAR-ECO project is one of 14 field programs that are part of the Census of Marine Life, a 10-year global study of the abundance, distribution and diversity of marine life in the world’s oceans. The Census began in 2000 and seeks by 2010 to determine what lives in the ocean and how this life has changed with time. The Census also strives to make information about marine life more accessible and usable through products like an on-line encyclopedia of both old and newly-discovered species.
The mid-ocean ridge system is a huge feature of the earth’s surface but has generally been the subject of very little biological study. It is important to understand what lives in the deep waters around and above mid-ocean ridges because they are such a major component of our planet’s living space.
Much of the expedition, which began June 12 and ends July 17, is focused on an area of the ridge around 52 degrees north latitude known as the Charlie Gibbs Fracture Zone, which divides the ridge into northern and southern sections. Water depths range from 1,600 to almost 15,000 feet and the terrain is very rugged, making it a challenging environment to sample and collect data.
The Henry B. Bigelow is one of four new NOAA Fisheries research vessels and supports the Northeast Fisheries Science Center. The Bigelow’s primary mission is to study and monitor marine fisheries in the Northeast U.S., but the ship also conducts marine mammal and bird surveys, participates in habitat assessments and is an observing platform for weather, sea state and other environmental data. The vessel is equipped with advanced technology known as “quiet-hull” that reduces the impact of sound on marine life and other advanced technologies for sampling and on-board studies.
Because of its fishing capabilities, the Bigelow is especially well suited for the goal of this cruise: to sample the deep-sea animals like fishes, shrimps, and squids.
Sea Trials for U.S. Carrier Carl Vinson
The nuclear-powered aircraft carrier USS Carl Vinson (CVN-70) returned to Norfolk, Va., on Wednesday after four days of sea trials – the flattop’s first taste of the open sea after more than three years in overhaul. The Vinson got underway June 28 from Northrop Grumman’s Newport News shipyard for the first set of trials to check out the ship’s refurbished systems. The trials are to be completed by July 11, according to the U.S. Navy.
The refueling overhaul takes place once in a nuclear-powered carrier’s life, which is scheduled to last up to 50 years. The Vinson was built at Newport News and commissioned in March 1982.
The carrier entered the shipyard in November 2005. The overhaul, which cost more than $3 billion, included refueling the ship’s two nuclear reactors, repairing and replacing ship systems and components, and updates to technology and other critical systems, according to the Naval Sea Systems Command. Virtually all of the ship’s 2,300 compartments were refurbished.
As a unit of the Pacific fleet, the Vinson was based before the overhaul at Bremerton, Wash. The Navy announced in March 2007 that the ship would likely shift its homeport to San Diego, which hosts the carriers Nimitz and Ronald Reagan.
Next up for a refueling overhaul is the Norfolk-based carrier Theodore Roosevelt, scheduled to enter Newport News by September. The carrier Abraham Lincoln, based at Everett, Wash., is to begin its refueling overhaul at Newport News in fiscal 2013.
The Vinson is a Nimitz class supercarrier named after Carl Vinson, a Congressman from Georgia. She was commissioned in 1982 and carries F/A-18 Hornets and F/A-18E/F Super Hornets as well as surveillance and other aircraft. The Vinson can carry 85 planes and 5,500 personnel.
Israel Eyes Locally Built Warship – Drops Littoral Combat Ship In Favour of German Design
TEL AVIV – In a radical revamp of its surface fleet modernization program, the Israel Navy has shelved long-held plans to purchase Lockheed Martin-produced Littoral Combat Ships (LCS), as well as a fallback option involving corvetees built by Northrop Grumman. Instead, sources say, the Navy is pushing to establish a combat shipbuilding industry through customized, locally built versions of a German corvette design.
Now in an exploration phase, the concept calls for a stretched, approximately 2,200-ton version of the Meko A-100 built by ThyssenKrupp Marine Systems (TKMS), the Hamburg-based consortium building two Dolphin-class submarines for the Israel Navy. Countries that are building or now operating the 1,650-ton German-designed corvette include Malaysia and Poland.
Defense and industry sources said Navy discussions with TKMS about a possible licensed co-production deal began in January and have steadily expanded to involve Israel’s Ministry of Defense, Treasury, relevant lawmakers and industry executives.
Under the plan, at least two ships would be produced at Israel Shipyards in Haifa, with state-owned Israel Aerospace Industries (IAI) a likely candidate for lead systems integrator. Each ship, and anticipated options for follow-on builds, would be integrated “with the maximum amount of local capabilities specifically designed to our operational requirements,” said an Israel Navy flag officer.
“One of the things we put on the table is how to vector our urgent operational needs into a project that can support local industry,” the officer said. “We believe a strong case can be made for making this into a national project that fosters self-sufficiency and provides all the economic benefits that come with creating a military shipbuilding industry.”
In an interview earlier this month, the senior naval officer said the revamped acquisition concept was driven by the prohibitive price tag of its preferred LCS-I (Israel) option.
Military, defense and industry sources here noted that since the Navy began pursuing LCS, unit costs surged from $220 million to $375 million to current U.S. Navy estimates, presented to the U.S. Congress in May, of $637 million. And while U.S. Navy and Lockheed Martin officials repeatedly maintained that rising U.S. costs for the full multi-mission system would have only a marginal impact on the Israeli program, which focused primarily on HM&E (hull, mechanical and electrical) equipment, experts here concluded otherwise.
10 Years of Study, No Deal
The naval officer acknowledged frustration at the millions of dollars and nearly a decade of study invested by Israel, the U.S. government and prime contractor Lockheed Martin to adapt the 3,300-ton system to local requirements. “As much as we sought commonality with the U.S. Navy, it became much, much more expensive than planned. At the end of the day, we had no choice but to face the fact that, for us, it was unaffordable,” he said.
When asked about the status of the Israeli LCS program, Fred Moosally, president of Lockheed Maritime Systems and Sensors, replied, “Israel decided they didn’t need any more work in that area.” Similarly, Israeli naval experts concluded that a Northrop Grumman-proposed package for two Sa’ar-5Bs – an approximately 2,300-ton design based on the service’s current operational Sa’ar-5 fleet – also exceeded projected budgets.
U.S. and Israeli sources said rough estimates for each Sa’ar-5B were about $450 million; but HM&E unit costs could have been reduced by more than $100 million had the Navy conducted a contract design. “When Northrop Grumman makes a fixed-price offer, it’s the result of an organized and serious process that allows the company to honor all of its commitments,” a company representative said. “Without conducting a contract design – which eliminates most of the uncertainties that drive up price – NG couldn’t offer the unit costs we all believed we could have delivered to the Israel Navy.”
In a Feb. 12 letter, the director of naval procurement at MoD’s purchasing mission in New York informed U.S. parties of the prospective change in acquisition strategy. “In the event this option turns out to be more suitable both in terms of our operational and budgetary requirements, the multi-mission ships will be built in Israel.”
High-Risk Program
Despite widespread interest in the Navy-spearheaded effort, huge budgetary, political and technical uncertainties still threaten the ambitious program, sources here warn. Assuming the customized Meko-100 meets naval requirements, and that MoD can conclude a deal with TKMS and the German government that allows Israel to leverage its investment beyond the planned domestic buy, it remains unclear how Israel intends to fund the program.
Unlike most major military acquisitions, which are based on U.S.-built platforms and funded through U.S. military grant aid, Israel will have to fund the bulk of the estimated $600 million program on its own. “We’re looking at all kinds of funding options, which do not necessarily have to come from MoD or [U.S. Foreign Military Financing] FMF accounts,” another senior naval officer said. “If the political leaders determine that this is a critical national program, then it’s reasonable to expect significant funding to come from the Treasury.”
A Finance Ministry official confirmed that experts from the two ministries are examining how the establishment of a military shipbuilding industry would concretely contribute to the Israeli economy. Once the two ministries can agree on benchmarks, he said, more detailed discussions will begin over how, if at all, the Treasury can contribute some advanced funding. “The idea is to find a formula whereby the Treasury can provide upfront funding in the form of a no-interest loan to MoD,” an industry executive in Tel Aviv said.
Merkava-Based Funding Model
Meanwhile, Navy and civilian defense officials have started to explore ways in which U.S. FMF funding can be applied to the program. U.S. regulations allow Israel to convert some 26 percent of its annual aid into shekels to finance local projects. But most of those funds over the next several years already have been earmarked for high-priority programs, including the Barak-8 air and ship defense system and the MF-STAR multifunction radar planned for the new ships. Sources here cite Israel’s indigenous Merkava main battle tank as a prospective acquisition model. Although the tank is built in Israel from locally developed technologies and subsystems, hundreds of millions of FMF dollars have been used over the years to finance the program.
Items purchased with U.S. aid include steel, other raw materials and the German-designed diesel engine co-produced in the United States by General Dynamics Land Systems and MTU. MoD is exploring a similar U.S.-based co-production arrangement that would allow FMF funding of the Meko ship’s MTU1168 engine, sources here said. “It’s doable,” a Pentagon source said. “Direct Commercial Contract guidelines allow them to use FMF to fund U.S. content on non-U.S. platforms.” A U.S. export license official noted, however, that as with the export-restricted Merkava, U.S. content gives Washington control over export sales.
