Despite approval last year, budget request must be resubmitted to new legislature and could be pushed back to 2006

Taiwan has delayed by at least several months its planned purchase of 12 Lockheed Martin P-3C anti-submarine warfare aircraft and three Raytheon/Lockheed Patriot Advanced Capability (PAC-3) air defence missile systems.

The cabinet early last year approved the purchases as part of a deal worth NT$198 billion ($6.2 billion) (Flight International, 15-21 June 2004), but Taiwan's legislature did not back the proposal mainly due to opposition to a purchase of eight submarines also contained within the special budget for US-made defence equipment.

Taiwanese industry sources say the budget request must now be re-submitted because a new legislature has been elected and because the USA is considering dropping the submarines from the deal to accelerate approval for the other equipment. The earliest a deal can be sealed is the second quarter, they say, although this could be pushed back into the second half of this year or even 2006.

Sources say the US government is holding eight P-3Cs from the US Navy's inventory for Taiwan, but has so far held off notifying Congress because of the delayed approval. The aircraft will be refurbished and upgraded, with some of the work to be done by one of several bidding Taiwanese companies.

A decision on where to source the work will be made by the USN after a letter of agreement is signed by Taiwan. A separate agreement will have to be signed for the Patriot systems.

Industry sources say wrangling over the special budget, the appointment of a new cabinet and the election of a legislature have created a logjam that also is holding back the 2005 defence budget and all new aircraft procurements, including attack helicopters.

Taiwan also has not finalised an expected $100 million contract with the Aerospace Industrial Development Corporation to begin the upgrade this year of 62 BellAH-1W attack helicopters with new communications, navigation and self-defence equipment.


Source: Flight International