Turkish Air Force $1.5bn Boeing deal back on
A major snag in the Turkish Air Force's $1.5 billion airborne early warning and control aircraft (AEW&C) program with Boeing has been overcome, procurement officials said in Turkey on Tuesday. Turkey's procurement office, the Undersecrateriat for Defense Industries, or Savunma Sanayi Mustesarligi (SSM) had insisted on amending the contractual clauses related to the escalation rate in the original 2002 contract, claiming it would work to Turkey’s disadvantage.
Hürriyet Haber
The escalation formula — which specifies the rules for increasing costs in line with a pre-agreed payment timetable, delays and other financing costs — was revised “in a way closer to SSM’s demands,” the SSM official said. He said the revised formula will save Ankara up to $100 million.
Earlier this year, an SSM payment to Boeing was suspended due to the dispute over the contract. In return, an SSM official said, Boeing unofficially threatened to take the issue to international arbitration.
“But we and Boeing sought an amicable deal and reached one in November,” the official said.
Turkey chose Boeing for the deal in 2000 and the two signed the AEW&C contract