Military Sitting on Billions of Unspent Funds

For a couple of years, Chile's government has been moving to end a copper tax used to finance defense acquisitions. But while the lower house has approved the measure, the Senate still hasn't. So, state-owned mining company Codelco continues to feed the military piggy bank, to the tune of $1.27 billion in 2012 and $1.49 billion in 2011. With few major purchases those years, the money is piling up. A German news report quoted in Infodefensa.com said Chile's defense savings total $4.2 billion. The report added that Chile plans to spend $7 billion to $11 billion in defense projects through 2025. It's not clear if the savings include Chile's defense contingency fund, which is believed to total more than $3 billion. But politics have a way of frustrating defense spending, even when there's plenty to go around. The government faces pressure to spend more on education, and reconstruction from the massive 2010 earthquake remains a big project. That has forced President Sebastian Piñera to rethink some defense acquisitions, according to an analysis by UPI. Public perception of the country's financial management might explain why there's been so few big-ticket weapons purchases since 2011. Chile's military greatly benefited from copper funds over the past decade as the metal's price surged. But there are risks with relying too much on the red metal. The price of copper has slid this year and Codelco's production fell for a second straight year in 2012. Today, copper is much about China's economy, making copper prices vulnerable to slowdowns in the Chinese economy. China accounts for about two-fifths of global demand for copper and Chile supplies about one-third of the world’s copper. There are domestic risks, too, such as mining-labor strikes.

Army Stepping Up Aviation Modernization

AS 532 Cougar

Chile's Army has acquired a medium helicopter, is buying three more and is moving forward with plans to purchase attack helicopters and new fixed-wing aircraft. Three AS 532 Cougar helicopters have been budgeted, while another Cougar (with a cost of $25 million) is due for delivery in a matter of weeks, according to reports in Jane's Defence WInfodefensa.com. The Cougar already is the backbone of the Army's aviation brigade, and plans are to create an air-mobile brigade with as many as 24 transport helicopters. To that end, Jane's reported the Army is considering the Eurocopter Tiger as a fire-support platform. The Netherlands has offered Chile a dozen used AH-64 Apache attack helicopters. But you can never count out Eurocopter, which has a close relationship with the Chilean military. If Chile opts for attack 'copters, it would probably scuttle a program to acquire light attack helicopters. Plans to replace the CASA-212 and CASA-235 light transport planes have taken on a greater urgency, Jane's said. The magazine reported that the entire transport fleet found itself grounded at a November joint exercise. (Makes you wonder if the lack of parts and maintenance was timed to coincide with the exercise, thus dramatizing the need for new planes.) The Army wants to acquire at least four transport planes. The C27J Spartan and Airbus C-295 are under consideration. Currently, Army aviation operates two C-235s and three C-212s.

Chile and Its Love Affair with the F-16 Fighter

F-16 MLU

The backbone of Chile Air Force (FACh) is the F-16, both in the Block 50 and MLU versions. The MLU jets were purchased used from the Netherlands and continue to be upgraded. All indications are that FACh is quite happy with the planes. They are equipped with cutting-edge systems such as beyond-visual-range missiles, JDAM precision bombs and mission-control software. The F-16 is also one of the cheapest high-performance jets to operate. "It costs the (U.S.) air force $23,000 per hour to operate an F-16C," Strategypage.com explains. "Other fighters are much more expensive. An F-22 costs $68,000 an hour, while an F-15C costs $42,000, and an F-15E $36,000." Could FACh buy more F-16s? There's no urgent need for more front-line fighters, even with the F-5 Tiger III squadron in semi-retirement. But Defensenews.com reported that Chile has shelved a program to acquire advanced jet trainers due to other budget priorities. Available funds, the article noted, are being shifted to the F-16 program, and a Lockheed Martin executive told the website that Chile hopes to do more upgrades on its F-16s. Of course, this means the advanced-trainer purchase is being sacrificed, at least for now. FACh wants to replaced its aged T-36 trainers with a model more adequate for F-16 pilots. Besides the T-35 Pillan basic trainer, FACh operates a dozen A-29 Super Tucanos that have some advanced electronics.

Army Acquires SpyLite UAV

SpyLite lands in Chile

The Army has agreed to make an initial purchase of SpyLite, a lightweight unmanned aerial vehicle that has extensive battlefield use. The $3 million contract is for six UAVs and control equipment, although it is expected that the Army will purchase many more systems. The first delivery is expected in about five months. SpyLite is a 20-pound vehicle suitable for reconnaissance missions. The manufacturer said won the competition thanks to its ease of use, performance and price. The UAV is made by BlueBird Aero Systems of Israel. It's the second time that an Israeli company wins a UAV contract in Chile, following the 2011 deal for the Hermes 900 from Elbit. Chile's armed forces and at least one private company continue to develop UAVs, nonetheless. Last year, for example, the Army conducted the first test flights of a UAV model.

Chile, Other Countries Team Up on Trainer Plane

Seven South American countries, including Chile, have formed a partnership to develop a basic trainer for their air forces. The goal is to develop and fly the first plane by 2015, according to Flightglobal. It's not clear who exactly will design and build the plane. Chile's participation in the project is not surprising because of two factors. One, its T-35 Pillan basic trainer has served for about three decades, and a replacement is needed. (A turboprop model introduced by Enaer as a follow-up model went nowhere.) Two, Chile has embraced partnerships with other aerospace companies in the past. For example, it is one several nations involved in the development of the KC-390 transport plane, being built by Brazil's Embraer. The other countries teaming up on the new trainer are Argentina, Brazil, Colombia, Ecuador, Uruguay and Venezuela.

Could Chile Lose its Edge in Air Superiority?

Peru is looking to acquire a fleet of second-hand Eurofighter Typhoon jets from Spain, according to Flight International. Peru's government made a formal request for 16 planes, with a cost of $61 million each and a relatively young service life of 600 flight hours. Peru is also considering other advanced fighters, including the Boeing F/A-18 and Dassault Rafale. Indeed, Peru is getting serious about upgrading its fighter capabilities, which for decades have rested on squadrons of Mirage 2000 and MIG 29. The Typhoon, Rafale and other jets Peru is considering were developed about 20 years after the F-16, and at least on paper they would leapfrog Chile's F-16 C/D and MLU planes. But in air combat, it's not necessarily the year of the plane's design that matters most. More relevant are the avionics, maintenance and training of the pilots, and in those areas Chile's air force can measure up. Its F-16 Block C/D jets have up-to-date navigation, targeting and mission software. Helmet-mounted aiming systems, beyond-visual-range AMRAAM missiles and other technologies make FACh a match for late-generation fighters. Chilean pilots are believed to spend more time in training flights than Peru's. Still, if Peru goes forward with the fighter acquisition, it would greatly narrow the air-superiority gap with Chile.