The goal is to reach an annual amount of 1 billion $ for defence exports

Defence Turkey: What do you think about the year 2008 in which important steps were taken in the defense industry? - What level of success has our defense industry achieved in respect of pro

Issue 15 - April 2009

For supporting the design of new products and giving more work shares to local SMEs, some relevant changes made on the evaluation formula of the Industrial Participation/Offset under the defence procurement projects in accordance with “Defence Industry Strategy Document”. Upon applying these changes on the projects, we believe that main Turkish contractors will be able to concentrate more on system design and integration processes. Additional positive outcome of these changes is expected to be the increasing number of SMEs working on the defence industry and their stabilization.

In this regard, in addition to pre – mentioned activities, the local industry is given considerable support by SSM in order for gaining certain critical technologies. Conferences, workshops, and seminars are organized regularly to inform the companies about the up-to-date developments in the sector. In parallel, Defence Industry Manufacturers Association (SASAD) is also arranging similar informative sessions for the defence sector companies. Consequently, we expect that the additional capabilities gained by local industry with the help of our support will eventually increase the work shares of the local industry.

On the other hand, we also have to consider the capabilities of our universities in the procurement projects. As we would like our industry to design and produce our indigenous defence products in the near future, the cooperation between universities and the companies, especially those having design centers, is essential. Therefore, establishing “Excellence Centers” is of primary importance and we have been spending a great deal of effort to create such centers.

Defence Turkey:Could you inform us about 2009 performance plan of SSM?

The purpose of Code 5018 is to regulate the structure and functioning of the public financial management, the preparation and implementation of the public budgets, the accounting and reporting of all financial transactions, and financial control in line with the politics and objectives covered in the development plans and programs, in order to ensure the effective, economic and efficient collection and utilization of public resources as well as accountability and fiscal transparency.

SSM is one of the leading public administrations which took initiative and prepared 2007-2011 Strategic Plan in a cooperative manner to form mission, vision, strategic goals and measurable objectives.

Since 2006, we are preparing annual budgets on performance basis and in accordance with the corporate mission, vision, strategic goals and objectives included in the Strategic Plan. 2009 performance plan is the fourth annual budget on performance basis with the budget estimations of next two years by considering 2007-2011 Strategic Plan. To ensure accountability and transparency; annual performance program and performance report are published on the SSM website.

I could say that SSM gained pretty much experience in performance-based budgeting but still there are areas that need to be developed such as activity-based costing.

Defence Turkey: Could you inform us about recent situation and coming process planned for 2009 in the ATAK and National Tank Project?

ATAK Program is now in System Requirement Review (SRR) phase. After defining the requirements, it will be concentrated on the preliminary design. It is planned to have the initial flight tests in order to test the engine modifications before the end of the year.

The Undersecretariat for the Defence Industries of Turkey (SSM) has contracted Otokar with the designing, development, integration, prototype production, testing, and qualification of first National Main Battle Tank of Turkey on July 29, 2008. Afterwards, Project Implementation Schedule has come into force on January 15, 2009. In Altay Project, South Korean Company Hyundai Rotem was chosen as technical support and assistance provider.

Furthermore, within the scope of ALTAY Project, ASELSAN, ROKETSAN and MKEK are responsible for accomplishing Tank Fire Control System, C3I System, Armor System and Main Gun, respectively.

As the recent situation of the ALTAY Project, Conceptual Design Stage has been started with the commencement of the Project Implementation Schedule and has planned to proceed 15 months.

Defence Turkey: There are improvements on the naval platforms with the projects of National Ship, Coast Guard Search and Rescue Ship, Modern Patrol Boat. Could you tell us recent situation of these projects?

In scope of the MILGEM (National Ship) Project that consists of the construction of 12 (4 optional) Patrol and Anti-Submarine Warfare Ships through local design, the first ship HEYBEL?ADA was launched on September 27, 2008 (470. Anniversary of Preveze Naval Battle Victory and Turkish Naval Forces Day) at ?stanbul Naval Shipyard and also the keel of the second ship “BÜYÜKADA” was laid, on the same day.

HEYBEL?ADA – the first local designed corvette – has been designed and constructed by ?stanbul Naval Shipyard with the participation of local industry through the material, equipment and services supplied by Undersecretariat for Defence Industries. In this respect, the hull appendages and form optimization and model trials of the ship was performed by ?stanbul Technical University, the design documents has been examined by Turkish Lloyd according to the Rules of Naval Ships (2004) and the platform construction and outfitting equipment have been produced and integrated by the local sub-contractors.

In scope of the Coast Guard Search and Rescue Vessel Project, that consist the acquisition of 4 Search and Rescue Vessels by RMK Marine - a private Turkish shipyard, the contract with RMK Marine became effective on June 30, 2008 and the construction of the first Vessel has been started on March 3, 2009.

New Type Patrol Boat Project Contract has been signed between SSM and Dearsan A.?. on August 23, 2007, for the acquisition of 16 New Type Patrol Boat for Turkish Navy. Hull construction of the First boat up to the main deck has been completed. Steel hull production of the Second and Third boats are ongoing. Factory Acceptance Tests for the systems and the hull for the First boat and FATs for the hull of the Second and the Third boats are still ongoing.

In 2008 It was decided to initiate contract negotiations with German Howaldswerke-Deutsche Werft (HDW) GmbH and Marine Force International LLP Consortium for the procurement of new submarine project. What kind of cooperation is planned to be achieved? What could you say about the current situation and the forthcoming process?

The project covers the construction of 6 New Type Submarines with air independent propulsion system. The submarines will be constructed at Gölcük Naval Shipyard with the participation of local industry and through the material packages to be supplied from the contractor.

Request For Proposal was released on December 28, 2006 and revised on July 12, 2007. DCNS (France), HDW/MFI Business Partnership (Germany) and NAVANTIA S.A. (Spain) submitted their proposals as of November 12, 2007. The evaluation of the proposals was finalized and on July 22, 2008, Defence Industry Executive Committe has decided to initiate the contract negotiations first with HDW-MFI Business Partnership. The contract negotiation, started on August 2008, is still on-going.

With the realization of the project, the infrastructure of the Gölcük Naval Shipyard will be improved and the shipyard will gain the know-how and experience regarding the construction and outfitting of submarine with air independent propulsion system. Also, in scope of the project, in which the participation of local industry at the maximum level is aimed, some of the systems and equipments to be integrated on the submarines will be produced and integrated by the local subcontractors.

In case the contract is signed with HDW-MFI Business Partnership, the 214 Class submarines will be constructed by Gölcük Naval Shipyard through the design and material packages to be supplied from the Business Partnership. There will be an industry participation and offset at the level of %80. In this scope, the industry participation will be achieved through the production and integration of some systems and equipments by the local subcontractors and the procurement of some infrastructure improvements from local sources.

When will the Turkish Frigate TF 2000 project be implemented and how are the studies in this subject going?

For the TF-2000 Project, which consists the acquisition of 4 Anti-Air Warfare Frigates that will provide survivability in the presence of aerial threat and also provide support to mission functions such as command control and communication, reconnaissance, early warning, surface warfare, anti-submarine warfare and electronic warfare, the studies to determine the project model is on-going.

Defence Turkey: Could you inform us about air defence programmes and projects? How will the process about these projects run and what is aimed?

Evaluation of Aselsan’s proposal for Self Propelled Low Altitude Air Defence Gun System and 35 mm Fire Control Device Modernization and Procurement Project is underway. We will present the results in the upcoming Defence Industry Executive Committee (SS?K).

Request For Proposals (RFP) were issued in September 2008 for Medium Altitude Air Defence Missile System (T-MALADMIS) and Low Altitude Air Defence Missile System (T-LALADMIS) Projects. Bidders Conference & Industry Day was held in SSM at March 9th - 10th, 2009. T-MALADMIS and T-LALADMIS proposals will be submitted to SSM by May 1st, 2009 and May 18th, 2009, respectively.

In order to develop our own low altitude air defence missile, we are planning to sign the Towed Low Altitude Air Defence Missile Project Contract with Roketsan A.?. soon.

For the Long Range Air and Missile Defence System (T-LORAMIDS) Project, Request for Proposal (RFP) will be released in March 2009.

We intend to make source selection for T-LALADMIS, T-MALADMIS, and T-LORAMIDS Projects in the first quarter of 2010.

We see these air defence missile programs being handled concurrently as a historic opportunity that can’t be missed to supplement existing infrastructure and capabilities in Turkey with the aim of developing our own air defense system.

Defence Turkey: Recently it was decided to start the contract negotiations with Telespazio in GOKTURK Reconnaissance Surveillance Satellite System Project. Could you please inform us about the upcoming process?

In the scope of GÖKTÜRK Reconnaissance and Surveillance Satellite Project, the Defence Industries Executive Committee decided to start the contract negotiations with TELESPAZIO S.p.A on December 18, 2008. As per the decision of the Defence Industries Executive Committee, SSM started the negotiations with TELESPAZIO S.p.A in January 2009 and it is planned to have the signature of the GÖKTÜRK Contract within the first half of 2009.

Defence Turkey: It is seen that General Purpose Helicopter Procurement Project is one of the major Projects in Turkey’s 2009 agenda. Could you please enlighten about the negotiations with Sikorsky and Agusta Westland on a production model based on long period?


Defense Industry Executive Committee (DIEC) has cancelled TSK Helicopter Program and authorized SSM to initiate UH Program on the basis of establishing long term business model with Contractor on December 05, 2007.

Bidder Evaluation Document (BED) has been issued by SSM on January 31, 2008 to AgustaWestland (AW) and Sikorsky (SAC) to procure 84 helicopters for Tukish Land Forces, Turkish Navy, Turkish Air Forces, Turkish Gendarmerie, Director of General Forestry and TAI has been announced as Main Contractor of UHP on July 15, 2008.

TAI has issued RFP to AW and SAC on August 01, 2008. AW and SAC proposal has been submitted to TAI September 29, 2008. TAI submit its proposal for UHP on November 24, 2008. With the participation of the National Police (20 helicopters) and Special Forces Command (11 helicopters) to UH Program first revision related with RFP has been issued on February 15, 2009 by TAI and TAI will submit UH Program proposal to SSM on March 23, 2008.

By taking into consideration of the volume of UH Program with the procurement of 115 helicopters; selection of powerfull and reliable Utility Helicopter platform which will be able to meet the needs for eight users for future twenty years, increase the local industry capability and global partnership with the selected company are essentials of the Program.

TAI will be the Main Contractor of UH Program and negotiations with AW and Sikorsky -as subcontractor - are based on:

- gain development, modification, system integration and test capabilities on the Helicopter

- designate Turkish industry as sole/secondary/qualified source for the determined components on the Helicopter

- set up final assembly line in Turkey

- increase the local industry capability

- have product partnership on risk share basis

- For world market agree on sales/logistics territories on the world.

Defence Turkey: Could you please inform us about the process and recent situation of HERON UAV?

The first Heron UAV System is under test and evaluation process.

Defence Turkey: As you said, the fact that the Turkish Defense Industry made a fast progress in many areas brought about the industry to be competitive in international markets too. Turkish defense industry increased its export capacity and entered new markets in 2008. Could you inform us about recent export activities?

In order to increase the defence industry exports, we have participated in 3 international defence fairs; namely SOFEX in Jordan, DSA in Malaysia and IDEAS in Pakistan. In 2009, we participated in IDEX Fair last month in United Arab Emirates and will participate in DSEI in UK.

We plan to visit various countries along eith Turkish defence industry companies in order to increase cooperation with these countries in defence industry, as we did for Saudi Arabia and Yemen in January 2009.

Our goal is to reach an annual amount of 1 billion $ for defence exports, by the year 2011.

-In this context what do you think about the export level the Turkish Defense Industry reached?

In 1997, the export figure was about 138 million $. As a result of our efforts and activities for cooperation and export along with the companies’ efforts, the defence export reached to 350 million $ in 2006 and 420 million $ in 2007. These are satisfactory progress.

-What kind of a strategy about the new and present markets is used and what are your joint goals for these markets?

Defence Turkey: Is there any plan in your agenda to participate into the international projects in 2009?

Turkey attaches great importance to international collaboration in defence industries. SSM is an active participant in AGS (Alliance Ground Surface) Programme aiming to meet an important capability need of NATO which is transforming itself to new and asymmetric threats of 21st century. On the other hand, from the very beginning Turkey is a major contributor of European defence cooperation. A400M transport aircraft programme which aims to give Europe an autonomous capability in strategic air transport is a good example of Turkey’s commitment to European cooperation in this field. Also JSF is another international project that SSM supports the indigenous firms’ contribution to the project. Considering Turkey’s long term defence and security policies, SSM has adopted a strategy toward laying down an internationally competitive, export-oriented defence industry in order for Turkey to be a leading participant in international cooperation either within NATO or Europe.

Defence Turkey: IDEF 2009 will take place in Istanbul this year. What is your assessment about IDEF? Would you like to add a message in this issue which will be distributed in IDEF participants, delegations and visitors?

The IDEF Fair, which is performed under the patronage and support of the Ministry of National Defence, is one of the best platforms in the region. Istanbul serves as a challenge this time, but also it brings many opportunities. The historical and geographical beauties of this city, we believe, will also contribute to the attention of the delegations from various countries.

We will be very much pleased and honoured to see and host all our guests and the companies and organizations which contribute to the defence industry, in IDEF. We hope that the IDEF 2009 will be successful in accordance with the our country’s and other participant countries’ expectations.