Wednesday, February 9, 2011

Details Emerge on Leopard 2, Marder Acquisitions

Chile paid 250,000 euros for each of 60 Leopard 2 tanks it acquired from Germany in 2009, according to a story in the German magazine Der Spiegel. The list price for Leopard 2s is around 3 million euros. But Chile spent 83 million euros on upgrades and repairs for the second-hand tanks. The cost for each Marder infantry fighting vehicle was 50,000 euros, compared to nearly 400,000 euros for a brand new Marder. But these vehicles were not in good shape, Der Spiegel noted. The magazine put the number of Marders purchased at 146, slightly more than the 138 previously reported. While the story mentioned 60 Leopard 2 tanks, the total purchase was for 132 tanks.

Wednesday, February 2, 2011

Leaked Document Confirms Arms Deals with Israel, U.S.

A briefing written by staff of the U.S. embassy in Santiago details a number of Chilean defense acquisitions that have never been officially confirmed. The confidential document, released by WikiLeaks, is nearly two years old, but reveals significant purchases and assistance deals. The bullet points:
  • The air force bought some AGM65 G2 Maverick air-to-ground missiles and GBU 10/12 Paveway laser-guided bombs, which were delivered starting in 2007.
  • FACH also has bought Derby and Python 4 air-to-air missiles from Israel for F-5 and F-16 fighter jets. The Stockholm International Peace Research Institute has reported this acquisition, although FACH has never admitted it.
  • The purchases of Sidewinder and AMRAAM air-to-air missiles plus JDAM systems, already disclosed, are mentioned. 
  • The U.S. offered Chile a pair of surplus KC-135 tanker planes for $42 million. But FACH declined and agreed to buy Airbus A-310 MRTT jets instead. (As it turned out, FACH canceled the Airbus deal and went back to the Pentagon to buy three KC-135 planes.)
  • Chile's navy ordered the SM-1 missile system for its Type 22 frigate, the Almirante Williams.
  • The navy wants to upgrade to the SM-2 missile system on its L Class frigates, which currently are equipped with the SM-1.
  • The KIT-1C MODE IV IFF (a friend-or-foe identification system) was purchased for the Cougar naval helicopters.
  • Marines have acquired the C2PC Command and Control system, a battlefield visualization software used by the USMC.
  • The document also discusses potential purchases that have been made public, including the Avenger air-defense system, Sentinel radars and M109A5 self-propelled howitzers.
The embassy staff also praised Chile's commitment and professional conduct of its peacekeeping missions, notably the effort in Haiti. The U.S. has provided some assistance to those forces. "We provided helmets, flak jackets and other accessories, vehicle spare parts, and water purification equipment," the embassy staff wrote. The U.S. also provided 10 Humvees and $1 million to Chile's army to improve English-language proficiency.

Tuesday, February 1, 2011

The Armed Forces as International Financiers

A huge fund for weapons acquisitions is no longer in the hands of a defense panel but under the control of Chile's finance ministry. The ministries of defense and finance agreed to the shift in recent weeks in a step toward more transparency in military spending. This followed a series of questionable expenditures. (See previous post.) The funds will be invested abroad in a move that could help keep the Chilean peso lower. Specifically, the military's money will be placed in a portfolio that mirrors Chile's foreign investment fund, which was created to curb inflationary pressures at home. Under a decades-old law, the state-owned copper company, Codelco, transfers 10% of foreign sales to Chile's armed forces for weapons programs. How much is in the fund is secret, but it has been estimated at upwards of $3 billion. Just in the first nine months of 2010, Codelco passed through to the Defense Ministry $866 million. The government, though, is moving to eliminate that funding source and replace it with a general fund.