Turkey asks missile defence bidders to extend offers

Reuters

ANKARA (Reuters) - Turkey has asked bidders in a missile defence system tender to extend the validity of their bids, Defence Minister Ismet Yilmaz said on Friday, keeping its options open despite provisionally awarding the deal to China.

The NATO member's decision to choose the $3.4 billion offer from the China Precision Machinery Import and Export Corp (CPMIEC) raised concerns among Turkey's Western allies as the Chinese company is under U.S. sanctions for violations of the Iran, North Korea and Syria Nonproliferation Act.

"When these bids are submitted, everyone says their bids are valid until a particular date in terms of price and the date of delivery," Yilmaz told state broadcaster TRT.

"If there is deadlock with the first bidder, we will turn to the second bidder. So we said, extend the validity of your bids, this is what we have asked."

Turkey announced in September it had chosen China's FD-2000 missile defence system over rival offers from Franco/Italian Eurosam SAMP/T and U.S.-listed Raytheon Co (NYS:RTN). It said China offered the most competitive terms and would allow co-production in Turkey.

U.S. and NATO officials have raised concerns with Turkish officials about the decision to buy the system from CPMIEC, a company hit by U.S. sanctions for sales of items to either Iran, Syria or North Korea that are banned under U.S. laws to curb the proliferation of weapons of mass destruction.

Sources familiar with the discussions said it could affect Turkey's plans to buy radar-evading F-35 fighter jets built by Lockheed, a program whose development Turkey helped to fund and which it hopes results in component orders for Turkish firms.

The sources told Reuters in late October that Ankara had asked the United States to extend the pricing on Raytheon's Patriot proposal, submitted together with PAC-3 missile maker Lockheed Martin Corp (NYS:LMT).

Raytheon Chief Executive William Swanson told analysts in October that his company stood ready to work with Turkey if it changed its mind about the Chinese system. Spokeswoman Pam Erickson declined to comment further on Friday.

Lockheed welcomed news that Turkey was open to further talks. "We welcome the opportunity to continue discussions with the Turkish government for their critical missile defence needs," spokesman Gordon Johndroe told Reuters in an email.

Turkey's Yilmaz said his country would welcome new bids from the three parties, should they wish to improve their offers: "How would this all affect us? It would ease our hand in negotiations with China," he said.

(Reporting by Humeyra Pamuk; Writing by Nick Tattersall; Editing by Susan Fenton, John Stonestreet and Andrew Hay)

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