No delays on Patriot systems, defense contractor says [with update from print version]

Although efforts to procure a fifth and sixth PAC-3 missile defense battery are ‘on track,’ Taiwan must sign the letter of authorization before the end of December, or prices could go up

A US defense contractor yesterday denied local reports that efforts by Taiwan to procure two additional PAC-3 air defense batteries were jeopardized by political bickering and a lack of funds.

The Chinese-language United Daily News on Monday wrote that since the US had agreed to sell two additional Patriot Advanced -Capability-3 (PAC-3) systems in January last year, the military had had difficulty raising enough money to complete the deal, as the cost of acquisition allegedly exceeded the military’s budget by as much as 40 percent.

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Contacted for comment, an official at Raytheon, the US defense firm that manufactures the Patriot ground systems, said it was their understanding that the purchase of the two fire units [and one training unit] was “on track.”

That position was echoed by a US-based source familiar with the situation, who told the Taipei Times last night that the program was in the final stages and on schedule to be signed this fall. The ministry on Monday denied the reports and said it was proceeding with the purchase.

My article, published today in the Taipei Times, continues here.

UPDATE: A source who contacted me after deadline had passed confirmed a few things regarding the PAC-3 acquisitions. As mentioned in my article, upgrade work on the three PAC-2 batteries around Taipei is proceeding, with Raytheon delivering the first Configuration-3 radar set to Taiwan in June, reportedly 11 months ahead of the schedule set by the Taiwanese Air Force. Regarding the four PAC-3 batteries and 330 missiles included the 2008 notification, Taiwan has already signed the LOA and delivery is expected by 2014/15. As for the two other fire units, one training unit and 114 missiles and included in the 2010 notification, the LOA is currently going through review process in Taipei.

The US side hopes Taiwan will sign the LOA soon, as the price option for the items included in the 2010 notification — which holds prices for most parts at the same level as for the previous four fire units — will terminate at the end of December. Any delay in procurement could entail additional costs in future. According to the source, failure to procure the last two fire units could become a political issue, as it would leave a large part of southern Taiwan uncovered.