Monday, June 25, 2012

What Chile's Next Military Budget Might Include

With the reform of the military budget all but a done deal, it's time to do some educated guessing on what programs are in line for the first four-year spending plan. Here are my estimations for major programs in the 2014-2018 timeframe, which would coincide with the next presidential term.
  • Airborne early warning. The sole Condor AEW plane is aged and FACH is looking at a turboprop-type platform. This is the type of weapon that can be used for anti-drug operations and has a high likelihood of being approved in time for the retirement of the Condor, perhaps in 2015.
  • Advanced jet trainer. The FACH T-36 Halcon planes are quite outdated. A plane with capabilities beyond the Pillan basic trainer and the Super Tucano is needed to fill a training gap.
  • Transport helicopters. The Army is trying to replace its old Puma helicopters with Cougar or Super Puma 'copters. This acquisition may happen before the next budget is drawn up, and perhaps as early as this year.
  • Attack helicopters. The Army has considered the Boeing AH-6 and similar light helicopters to replace about 15 MD-530 helicopter used in the scout role.
  • Submarines. The two Type 209 subs will need to be replaced in about 5-8 years. A new contract or even a request for bids may not happen in the 2014-2018 budget, but certainly in the next one.
  • Offshore patrol vessel. A slam dunk for the Navy, which has long planned to have at least four OPVs built domestically and is already at work on the third.
  • Air defense system: The Norwegian NASAMS and Avenger systems have already been selected. It's unclear if contracts will be signed before the next budget.
  • Wheeled armored vehicles. The Navy needs to equip its amphibious assault ship with 30-40 APCs. Stryker and LAV 8x8 vehicles have been rumored to be choices. This is another program that may be funded during the current presidential administration.
  • Tactical transport planes. Two or three C-130 Hercules remain in service and they are reaching the end of their useful life. Chile is one of the partners in Embraer's C-390 project and it is expected to purchase five of the planes.
  • Unmanned aerial vehicles. FACH has already purchased three Hermes 900 UAVs and reports have said the Navy and Army could follow with purchases of their own.This is another system whose civilian applications make it more likely to be funded. Also expect tactical-level UAVs to be acquired.
  • Maritime patrol aircraft. The Navy's P-3 Orion fleet needs extensive repairs, and a decision has been made to replace them with C-295 Persuaders. The Navy already has acquired three Persuaders and is expected to exercise an option for five more.

Tuesday, June 19, 2012

The Slog to Rid Chile of Minefields

One by one, Chile is finding and removing thousands of landmines dating back to the standoffs with its neighbors in the 1970s. But less than one-third of all mines are gone. More than 180,000 antipersonnel and antitank mines were planted in various border areas. So far, some 50,000 have been removed, leaving years of work still ahead. Chile's government this month took an unusual step, hiring a relief organization, Norwegian People's Aid, to cleanse an area that straddles the Peru-Chile border. This is the first mine-clearing job in the country for People's Aid, which has been involved in Chile since 1985. The new program arose after storms caused dozens of mines to wash onto beaches and roads. Also, a Peruvian taxicab drove through a marked minefield, killing the driver, in May. Chilean Army and Navy engineer units have been clearing mines since 2002, as part of Chile's obligations under the Treaty of Ottawa. Some Chileans don't mind the minefields at all, believing they deter drug trafficking and illegal immigration. To their disappointment, the mine-clearing job may be slow but the government is committed to finishing it. From a military standpoint, the minefields no longer have much use because they've been identified and marked. But in the 1970s, the mines helped Chile narrow a big gap with Peru's potent military.

Saturday, June 16, 2012

Submarine Back in Service After Delayed Refit

One of the Navy's Type 209 submarines returned to duty for the first time since it went into refit in 2009. The work was delayed about one year, after the February 2010 tsunami ravaged the Simpson while it was in a repair dock. Some of its pieces, such as the plotting table (which had been taken to a separate area), have never been found. The refit included new command and control and combat systems. Much of the new electronics suite was provided by Desarrollos de Automatizacion, a Chile-based company that makes military software and components. The upgrades will keep the 27-year-old sub operating for "several more years," a naval officer said. Look for the Simpson and its sister ship, the Thompson, to be in line for replacement in the first 12-year strategic acquisition plan the government puts forward. (More on that in later post.)

Wednesday, June 13, 2012

Defense Budget Overhaul Clears Legislative Hurdle

The most sweeping revision of Chile's military budget passed unanimously in the lower chamber of congress Wednesday, June 13, clearing an important milestone. The proposal now moves to the Senate. For decades, 10% of export sales by the state-owned copper company, Codelco, have been earmarked for military acquisitions. The new law eliminates that lucrative mechanism, replacing it with a budget process similar to what other government agencies use. That is, lawmakers will get final say (really, a say for the first time) on the defense budget and there will be much greater transparency in acquisitions. The "copper law" yielded upwards of $1 billion a year for Chile's military, and no doubt the new financing system will reduce those sums. Yet, the revision establishes an annual spending floor of 70% of the average sum the copper law provided from 2001 through 2010. That works out to roughly $600 million. In general terms, the new mechanism sets up a broad strategic budget drawn up every 12 years, and more specific outlays approved every four years. A Strategic Contingency Fund will be set up to finance a potential conflict, or to take advantage of a noteworthy bargain in the international arms market. It will be initially funded with the copper law surplus, which is believed to be a few billion dollars.

Monday, June 4, 2012

EADS Partnering with Chile's ENAER

EADS will form a partnership with Enaer, the aviation services and manufacturing company operated by Chile's Air Force. The two firms will form a new company that will manufacture aircraft components and provide maintenance services. The deal increases EADS' footprint in Chile, where the European consortium has had success selling military planes (C-212, C-235, C-295), helicopters (Super Puma and similar models) and a satellite. Enaer's current activities will be folded into the new company, which will provide Enaer with fresh investments and a larger workload. But Enaer employees are not happy with the news. They fear hundreds of workers will be laid off. Enaer has had its ups and downs. It has a steady business servicing Air Force planes and some civilian jets, while boasting Chile's most successful military export: the T-35 Pillan basic trainer. But there have been times when business was light and the company was posting losses. In 2009, management laid off 200 workers.