SSM - Breaking down Barriers, Building National Strength in Technology & Export Infrastructures, Promoting Side Sectors, Utilizing Expertise for the Future & Independence of Turkey

In an exclusive interview, Prof. İsmail Demir, Undersecretary for Defense Industries SSM provides insight into activities focused on encouraging new enterprises, channeling them according to integration and requirements, seeking possibilities for foreign capital and technology contribution, guiding enterprises and making plans for state participation; re-organizing and integrating existing national industry to satisfy defense industry requirements

Issue 74

Defence Turkey: Dear Mr. Undersecretary, first of all we would like to thank you for your time.  The Defense Industry Strategy Report for 2017 – 2021 was recently published by the SSM.  What strategies  will stand out during the next quinquennium such as R&D, what are the priority areas?

According to the published strategy report, we have concentrated on areas such as the broadening of the industry and the eco-system, execution of exports and sustainability and logistical support in line with certain programs. We have to focus on advanced technology and gaining technological independence. The breakdown of our systems is important for us, enhancing the local content rate and diminishing foreign dependency in critical technologies will be regarded as one of our objectives. 

Defence Turkey: Will you be concentrating on brand new ground-breaking technologies such as robotic technologies and industry 4.0?

The smart systems or the unmanned autonomous systems are very trendy in the defense industry recently. Therefore, we are aware that integrated mechanical electronic software is in the ear of entire sectors. So, the technologies that would boost its efficiency in the theatre, reduce risks through technological superiority and that bring advantages in the field need to stand out, rather than the number of operational activities. The programs referred to as conventional technology which we currently do not possess technologically, foreign dependency -  areas in which the local content rate is low, will be on our agenda in the upcoming period as well. Development of engine, transmission and power-pack systems in various classes that are amongst Turkey’s primary requirements and their utilization will be a part of our most essential areas in the next period as well.

Defence Turkey: Similarly, the Defense Industry Strategic Plan on Exports has also been published quite recently. What are the new activities and strategies envisaged to this end?

The Defense Industry is one of the sectors with the greatest potential in respect to exports, but we cannot fully benefit from opportunities until we adequately fulfill our potential. What do we need to do in order to benefit more from this potential? We need to keep up the pace with high-tech technology on global scale, attend international exhibitions and our companies need to promote their capabilities better. As the Undersecretariat for Defense Industries, representing the state, we need to enable all support to all of our companies conducting export activities, without exception. There are certain exhibitions abroad that we ensure national participation under the coordination of the Undersecretariat for Defense Industries, we also are closely monitoring and encouraging the promotion activities and participation of our defense industry companies in worldwide exhibitions which we do not officially attend as the procurement authority. The growth and development of our defense industry are of  particular concern to us. Therefore, we will intend to press ahead on export activities with the same appetite and determination; however, it is not easy to instantly get result the outputs of these efforts, especially in this sector. We rely on the fact that we will be striding out in respect to exports as we continue to demonstrate our indigenous products and technologies in the high profile fairs of the world, presenting the outstanding features of our products and the concrete field performance of our products which have proved themselves in theatre to the procurement authorities efficiently.

 We have the IDEF 2017 defense industry exhibition, which we will be hosting.  The event showcases our unique products and technologies on stage. Throughout this exhibition we will be conducting both G2G and G2B level official negotiations with many globally renowned companies, procurement authorities and with official delegations attending upon special invitation. Our companies will be executing bilateral negotiations similarly with the official delegations and companies abroad as well. We aim to build up an atmosphere in which effective cooperation is built and trade will stand out during the exhibition. Thanks to the interest shown toward our unique products and the interest shown to us, we will be able to closely analyze the export potential of the Turkish Defense Industry in the upcoming period.

Defence Turkey: Could you please inform us on the recent developments regarding the export credit mechanism?

We still lack an automatic mechanism that could be turned into an official implementation. It is possible to form a credit mechanism according to the requirement and content of the program, and we implemented this before. Our credit request was approved as part of a project we accomplished with Pakistan and we received a positive reaction in this sense. When we have the chance to gather our statesmen together on various platforms, it seems that they are leaning towards this mechanism. Discussions on necessary regulations in respect to rendering this mechanism systematic seems to ever appear on the agenda.

Defence Turkey: The negotiations conducted for the procurement of the S-400 Long Range Air Defense and Missile Systems are active and the final decision has not been made yet. Could you please assess the latest status within this scope?

There is a misperception in the public eye regarding this issue and primarily we have to correct it. As the public authorities, we have even underlined the following fact and we continue to emphasize it. As Turkey, we are developing our indigenous Air and Missile Defense systems in an understanding of a national, multi-layered and multi-staged concept. We have initiated the building of our multi-layered and multi-staged air and missile defense umbrella with increasing altitude and ranges consisting of the antiaircraft systems to “Korkut” Self-Propelled Air Defence Gun System and “Hisar-A” and “Hisar-O” Low and Medium Altitude Air Defense Missile Systems. We aim to utilize the experiences and know-how gained especially within the scope of Hisar-A and Hisar-O Low and Medium Altitude Air Defense Missile systems in our Long Range Air and Missile defense systems which constitute in another stage.  Our journey on developing the Indigenous Air and Missile Defense System are going-on. Besides, we have declared the following point; while we continue to develop the Long Range Air and Missile Defense Systems through indigenous and local resources, if there are any companies or countries that aspire to cooperate with us, we are available for cooperation, to utilize their requests and we constantly underscored key areas in which we could team up and we carried out our negotiations with the relevant parties. Several country names came to the forefront as we conducted these negotiations. Russia has also been included in the countries that we contacted with in the recent period. We are speaking of the procurement of a system, instead debating about whether or not we made a definitive agreement here, we are discussing the potential of collaboration which would support our existing achievements. Russia has been one of these countries. Since the development of our indigenous systems will be consuming a certain amount of time, we are evaluating all the options comprising the off-the-shelf procurement option as we try to figure out how promptly we could cater to the urgent requirements of the Turkish Armed Forces and we are negotiating not merely with Russian delegations but also with France and the Unites States as well. The negotiations with the Chinese currently continue on a low profile. Public opinion regarded the negotiations conducted with Russia as follows; Turkey and Russia, have signed the definitive agreement and will be procuring the S-400 Air and Missile Defense Systems. We definitely do not adopt the understanding of “we accomplished the tender within this program, signed the contract, made the off-the-shelf procurement, fulfilled our request and we are concluding this program”, not at all.  Instead, we are pondering on the method in which we will be able to proceed with the understanding of a concept enabling us a broader perspective.

Defence Turkey: It seems that the S-400 Air and Missile Defense System is a quite effective system particularly towards Air Breathing Targets, yet when we discuss of Ballistic Missile Air Defense we move onto another stage and we have to evaluate this within a far-reaching perspective. Within this scope, which type of a strategy will we pursue toward adopting measures against such threats as we also develop our independent systems?

We imply this, as we refer to a multi-layered and multi-staged systems; Long Range and Advanced Air and Defense Systems exist in the next stage of the Low and Medium Altitude Air and Missile Defense Systems. The capabilities of these systems should not be limited to their capacity against entirely Air Breathing Targets or Ballistic Missile threats.

The technologies that need proper interception capabilities alter according to the range and class of ballistic missile threats. An array of key factors such as fast reaction time, more accurate detection etc. step-up according to the classes of the ballistic missiles with longer ranges and their parameters such as terminal phases, velocity, etc. A system capable of intercepting the threat at a higher altitude similar with the American THAAD system is in question here. As Turkey, we initially launched to develop the Hisar-A Low Altitude Air Defense Systems. Where Hisar-A is a system intercepting Air Breathing Targets at a range of 16 km, Hisar-O Medium Altitude Air Defense System is capable of intercepting targets at a range of 25 km. If we define these efforts as a journey, then we need to proceed by increasing our accomplishments stage by stage.

Defence Turkey: Dear Undersecretary, there are multi-national projects in development stages which will provide interception capability against BM threats as well as Air Breathing Targets, enabling joint participation such as MEADS.  What is Turkey’s approach on participating in such programs?

Following the cancellation of the Turkish Long Range Air and Missile Defense System tender, there have been certain changes in the MEADS program too; there has been a new structuring. They would like to negotiate with us in that stage as well. As we have always stressed, our doors are open to everyone and we conducted an array of negotiations in order to become familiarized with the system to this end. We always put our cards on table and are open to new models and suggestions of allied willing to accomplish a sincere cooperation on the MEADS program or on further subjects. We will present our counter offer to the other party and we can proceed together if we reach an agreement. Our approach to this subject is clear.

Defence Turkey: It seems that Turkey attained a crucial milestone with the recent announcement of Roketsan’s development of the BORA TBM with 280 km range? What are your assessments on the advantages to be acquired by this capability?

We regard this achievement as an important step in respect to Turkey’s deep-learning and implementation of critical technologies. Turkey is crossing the critical threshold as guide control and reaction propulsion systems constitute the implementation area of certain technologies. We have reached a desired range as of now.

Defence Turkey: The PDR (Preliminary Design Review) stage has been initiated within the scope of TF-X program, how will the following process proceed?

We launched a tender for a process comprising the PDR stage. PDR stage defines a process in which the design emerges and matures. Our greatest ambition is to accomplish the PDR Stage on-time.  Upon accomplishment of this stage, all details of the aircraft will be revealed without putting a question mark in anyone’s mind. We are expecting to finalized the PDR stage by the end of 2019 or at the beginning of 2020.Then we will have the CDR (Critical Design Review) stage ahead and a long path towards the prototype production. The tender has been launched and the main contract is only comprised of the PDR stage for now. I believe that we will be able find out crucial inputs in this activity that is focused on design. You may address the question as to why we did not prefer a contract that included the prototype manufacturing as well. As an inexperienced country in this field, we deemed it more convenient to sort the program into phases in order to both reduce the risks and to monitor the contractor company’s performance better, and thus proceeding by staging the process in accordance with the performance of the company. As you know, a Foreign Cooperation Partner (YFI) to conduct technical cooperation has been selected at this stage. We decided to proceed by enhancing the acquired capabilities as part of the TF-X program.

We are not in doubt that we will unveil the first prototype in 2023; once we have identified the basic parameters of the aircraft, we have operational requirements, then we will gradually introduce evolutionary processes that will fulfill these requirements stage by stage. The acquirement of additional capabilities and retrofits are aimed for the following stages: regarding the software, hardware and various aero-dynamic structural components of the aircraft, which is to be acquired after the identification of the main parameters as well as with the F-35 JSF program. We plan to clearly define our operational conditions in the initial stage and then build a fully operational Fighter Jet by proceeding stage by stage.

Defence Turkey: When is the engine selection planned to take place as part of the program?

We will be frequently discussing the criteria on the engine selection within the year ahead. All parties of decision makers mutually agreed on a twin-engine aircraft last year. Similar to platform development, engine development also consists of various stages. We are delighted about the integration of the unique engine to our Indigenous Fighter Jet, but this may sound a bit assertive. Therefore, throughout the development process of the aircraft, the selection of a certain engine already proved itself and whether or not to use this type of an engine throughout the prototype stage, are still being discussed. 

We have specific options in this stage; it may be possible to combine two concepts. This implies that when we select the engine we may be able to integrate it at the prototype phase, we may conduct the process with the same company by outlining the following stage and combining it with the unique engine development phase during the prototype stage. Such a strategy may also come up on the agenda.

Defence Turkey: Dear Undersecretary, will the approach for completely domestic participation continue in the production of the critical technologies, especially within the scope of the TF-X program? Or do you aim to cooperate with foreign companies through joint development, joint production models regarding certain technologies, as also seen in the main program?

 We aim to attain the critical technology entirely with home production modality. We learned the hard way that obstacles emerged when the sub-systems and critical technologies are not developed through local resources. We experienced in the past and present that we may confront various problems and restrictions in the procurement of the technologies due to external dependency. Mostly, this disadvantage is being utilized as type of repression. Within this scope, during the development stage, it may be possible to procure identified components or systems from the parties with which we have good cooperation with or from parties willing to cooperate, but we will not give up our ultimate goals of home production. Even though we have quite good cooperation for the time being, we may not know how they will proceed in the future. We will particularly focus on the indigenization of critical technologies and will pave the way for a basis for the activities to this end.

Defence Turkey:  Have there been any discussions about including different countries in this program, and to possibly turn the program into a multi-national one? Is a different picture emerging throughout the PDR stage and what type of infrastructure activities are occurring that may relate to this?

 We have a positive stance regarding this issue. The financing of complex and complicated programs like this one is quite high, then again, we are aware of the fact that there are a limited number of countries all over the world attempting to conduct such a major program. We need to approach the issue from this perspective. In case a chance for very long term cooperation is possible and if the countries with which we have long-standing cooperation are interested in the program, we may consider their participation. We have no prejudice in this respect.

Defence Turkey: It was recently declared by our Ministry of National Defense that the serial production process as part of the Altay MBT program would be concluded in May. What type of a resolution awaits us in the upcoming period? Will it be a consortium model that has applications and reduces the risks? Or will you be proceeding over an existing model with a single main contractor with the best bid and production capability? What are your assessments?

 The evaluation process continues for the time being. We submitted the proposals for the serial production process from the company that conducted the development, evaluated it and request them to revise their proposal. We conducted another negotiation, revised all parameters and went through a quite long bargaining process. Yet, we also need to submit the delivery of the technical data package which is amongst the obligations to be fulfilled by the company at this stage. As also mentioned by our Minister of National Defense, we will reach a decision within a month. It is difficult to mention the content of the decision at this stage because we reached a certain point as a result of these negotiations and we have to take the final steps regarding the output of these efforts; the negotiations are on their due course and it would not be proper for me to declare anything now. In this respect, I will kindly ask you to wait a bit longer.

Defence Turkey: Will there be any statements on the launch of the serial production during IDEF?

There may be a statement on the launch of the tender for the serial production but there will be no declaration on the final decision reached.

Defence Turkey: Taking the urgent requirements of Turkey into consideration, how will the serial production process, first delivery and annual production schedule will be planned as part of the Altay MBT program? 

We have a request for a lot of 250 MBT for the first phase of mass production. Our official contacts with the Turkish General Staff and the Land Forces Command continue to this end as the requirements of Turkey are not limited with merely 250 MBT. If they notify us on their rather long term requirements, we may be able to take further steps easily regarding the tender process. When the number of ordered tanks are increased, the companies or the company selected will be able to draft an effective-cost plan with a clearer future vision. As a result of the relatively lower costs due to the increase in the order quantity, this will also trigger firms offering more advantageous offers.

Defence Turkey: Dear Undersecretary, one of the most controversial points throughout the serial production process of Altay MBT has been the subject of engines and transmissions procured from foreign countries. With the recent license restrictions frequently appearing on the agenda, has there been a negative impact on the program during the serial production process? What are your comments on this issue?

 There are no such risks for the time being. There seems to be no restrictions as a result of the negotiations conducted with the company. Yet, even as we launch the serial production, the procure of these engines will take at least 2- 3 years. Also, we have existing engine development programs for this that we can relaunch. We endeavor to adopt all the related measures. There is a waiting period related with the of these engines and transmissions but there appears to be no problem on the horizon regarding the license restrictions for now. The restrictions discussed by the public opinion are rather those that are connected with daily life or regarding programs of smaller scales. As the volume of the programs increase, we expect both the countries and companies to think more thoroughly.

Defence Turkey: The contract on the Power-pack Development Project has been terminated due to the Foreign Technical Support Provider Company’s failure to overcome the license restrictions and to fulfill its commitments. Could you please assess the recent developments within this scope? These license restriction issues with Europe frequently appear on the agenda. Is it possible to proceed with countries with experience in this area that are willing to cooperate with us, such as Ukraine, Japan and South Korea? Recently, Ukraine made a serious offer to this end. What would you like to say in this regard?

Our main contractor companies competing within the scope of the power-pack development program tender submitted its bid with the foreign technical support provider company. These main contractor companies have committed to us on which foreign technical support provider they would cooperation with as they made their proposals for the tender. Following the conclusion of the tender, the activities would be launched upon the contract made with the technical support provider. Yet, the technical support provider company did not fulfil its commitments during this stage. The companies, they negotiated with in the sequel could not keep their side of the bargain either and some of them encounter the obstacle of the license restrictions of their governments. We went through all these situations a year and a half ago. During the elapsed time, the awarded party, main contractor conducted official negotiations with various countries or parties and even reached a certain point. But at that point we coped with a higher cost and the request of an extended time frame. They claimed that they could not find any foreigner technical support provider, they did not state that they would withdraw from the tender, they told us that they could not fulfill the precondition, that they still may achieve it with modified costs as the conditions altered. It is not legally possible for us to fulfill such request within a tendered program. We launched a tender, the competition process was accomplished and then the awarded party request to amend the provisions such as costs as well as program schedule. Even if we approach this offer admissible we could not approve it legally. Although the tender has been annulled the contract, the awarded party has already agreed the foreign technical support provider company. We have no risks in that sense. Regarding your question considering Ukraine, we have signed a comprehensive MoU with Ukraine; one of the clause of this MoU comprising the cooperation to be built-up on the engine and transmission technologies. Let it not be perceived as if we are purchasing engines from Ukraine.

Defence Turkey: Could there be a new model through a new tender or through the consortium of local companies in the upcoming period?

 It could go either way. We are already maintaining own engine project; even though the power categories are different we have an existing power-pack project. At this point we assess the capabilities of the company executing the program, if we manage to achieve the acquisition of a capability towards the development of a power-pack system for the Main Battle Tank by increasing the power category further, then we can proceed from this point. Launching a new tender may be another option too. We will assess this option by negotiating with the company. Actually, we are willing to create a consortium, a cooperation model by gathering the various existing capabilities and resources in Turkey. Surely, this will be at the disposal of our private companies, we cannot force them but we can give advice to them according to our approach.

Defence Turkey: The Main Contractor is going through a severe financing problem in the A 400M multi-national program and as a result critical delays are faced during the deliveries to the partner countries. The financial resource problem continues despite the additional resources provided in 2010 and this hampers the sustainability of the program. Besides all of these obstacles, Turkey recently delivered its fourth aircraft. Where do you see the future of the program, delays in the deliveries and Turkey’s business share in the program? 

In this multi-national program, various partner countries exist in apart from Turkey. OCCAR conducting the program on behalf of the partner countries also executes the cooperation’s with the main contractor. The given company shares its financial status with the partner countries and we pay attention to their requests but this does not mean that these countries would be renouncing their requirements. None of the countries have the positive attitude to create a new fund when they observe a financial gap in this program. Then again, I do not think that any of the partners would wish the failure of the program. High level, official meetings are being held between the parties. The overall attitude here is that the main contractor should be recover lost time more seriously, if the company needs to relieve itself, the company is expected to fulfil its commitments for the future on aspects such as the product delivery, logistical or spare part support. We can say that the attitude of the partners considering this subject is very clear. 

Defence Turkey: Dear Undersecretary, how are the developments proceeding regarding the delivery of the aircraft replacing our aircraft which was crashed two years ago?

We recently took delivery of our 4th aircraft. The aforementioned procurement will be accomplished in the upcoming period, there are no problems considering that issue. 

Defence Turkey: Dear Undersecretary, important progress was achieved regarding the export of the Atak Helicopter to Pakistan but it is frequently discussed in the public eye that the procurement could not be concluded due to financial reasons. Could you please elaborate the recent status of the negotiations between the parties to this end?

The understanding that the failure to accomplish the sale of the “Atak” helicopter to Pakistan was due to financial problems is not a very accurate judgment. The delay of the program due to the rejection of the requests of a financial support is not in question. We are waiting for the Pakistani party to make a decision on the procurement of the “Atak” helicopter, We are taking all the steps and actions necessary toward obtaining financing at points with financing expectation, we are generating solutions in this respect. 

Defence Turkey: In which direction are the activities launched for the indigenization of the turreted gun and Electro-Optical Roconnaissance,surveillance and targeting system within the scope of the Atak Helicopter proceeding?

There are important developments regarding the electro-optical reconnaissance,surveillance and targeting camera systems. These optical camera systems bear great importance for our UAV systems, surveillance and reconnaissance aircrafts and helicopter platforms. Soon we will be able to give the good news about our products. Aselsan has important steps on this subject; shortly we will provide the news about them as well. The development of the turreted gun will be a long-term activity but our studies are on their due course. 

Defence Turkey: The firing tests as part of the Armed Hürkuş-C program have been successfully accomplished very recently. How are the negotiations proceeding for the procurement of these aircrafts with the Land Forces Command? Also, you made a statement that the first armed Hürkuş can be operational in June. Could you please elaborate on this issue?

Hürkuş has been designed as the New Generation Basic Trainer Aircraft. However, these aircrafts are capable of conducting close air support missions when armed, currently in our country and in the world. Within the scope of such requirements, we exert utmost efforts to accelerate the process anticipated for the configuration of Hürkuş-C Light Attack Aircraft. We outfitted to armed one of the two aircrafts being used as test aircrafts and rapidly passed it to the field. The attitude of TAI is crucial at this point, they too made certain commitments to us, to accelerate the process. While we conduct the serial production of the Hürkuş-B which is the Military Trainer Aircraft of the Turkish Air Forces, we will be enabling the production of the armed Hürkuş-C configuration.  We have been conducting negotiations with the Land Forces Command in order to shape their clear request regarding the ordered and program schedule. There will be a certain number of aircraft orders placed within this scope. But before these orders become apparent, we strive to immediately establish the serial production line by conducting the required set up a substructure, and to enable the rapid completion of both our Land Forces Command’s Armed Hürkuş-C Light Attach Aircrafts and our Air Forces Command’s Hürkuş-B New Generation Trainer Aircrafts to on the serial production line. Noticing the urgent requirements of Turkey, main contractor must act quickly, this is very important for us.

Defence Turkey: When is the final resolution on the Milgem 5-8 “I-class frigate” program expected to be given? Could you please evaluate the latest status?

The envelopes have been opened in the tender and our colleagues are continuing to consider the proposals. The construction activities of the 5th MILGEM ship have been launched at the Istanbul Shipyard Command; 6th, 7th and 8th ships will be built and outfitting by the private sector shipyards, but the tender will be comprising a total of 4 vessels. Although the 5th ship is to be constructed at the Istanbul Shipyard Command, the procurement process will be conducted again by our private sector shipyard which won the tender. There are surely certain grey areas at this point but we believe that we will clarify them in time as well.

Defence Turkey: What are the latest developments regarding the program on the Akıncı UAV with 1500 kg payload capacity? Do you plan to proceed in line with a model based on a single main contractor? Or will a model in which existing capabilities and assets be utilized?

Currently we are evaluating the existing capabilities and encouraging the companies to negotiate with each other. Launching a tender and making a selection through competition is possible and we also envisage that a consortium model in which the companies could support each other, thus combining capabilities as a part of this program. Currently we are at a very early stage to tell what the result would be. We continue to classify and evaluate the capabilities, we know what to do and we know one’s own mind. In my opinion a cooperation or consortium model would be more effective at this point.

Defence Turkey: Lastly, is there any message you would like to convey to the readers of Defence Turkey?

I would like to convey the following message to all readers focusing on the Defense Industry and to our shareholders. We have an array of companies enthusiastic about accessing the Defense Industry sector, these companies should not lose their contact with us and they should never give way to despair. We occasionally received complaints of our companies. Especially, small scaled companies may feel blocked and they were desperate about this. Here we are striving to establish a sector in which our companies could extend to the widest base as possible. One of our greatest goals is to reflect Turkey’s richness onto the defense industry, because each capability that we cannot find out or fail to gain for our sector will be Turkey’s lacking. We are aspire to achieve all capabilities in Turkey in the field, in a highly important and national arena such as the Defense Industry. We should have no deficiencies on this subject. In this respect, the companies should always be in touch with us regarding the issues they consider they have deficiencies. Our doors are constantly open to them in this sense, they should never feel left out as we endeavor to build certain incentive mechanisms. They should constantly keep in touch for us, moreover we are willing to listen them if they suggest an incentive mechanism or in the event that they have requests. I believe that the defense industry should be conducted with the spirit of national mobilization. In this period that we’ve been going through together, we have the chancing conditions to analyze this point clearly.

In Turkey’s struggle for ‘freedom and future’, we do not utter these words simply as a mere motto, we are building the future and this can only be achieved through independence. We must have the power  to reach independence.

Defence Turkey: Thanks very much again for your time.