Fri, Jul 16, 2004 - Page 8 News List

Time running out for AEGIS deal

By Wendell Minnick

Taiwan is being urged by the US to become more assertive if it wants to procure AEGIS-equipped destroyers.

"Taiwan needs to communicate a renewed interest in the platform with a new aggressive campaign -- a firm letter of request [LOR] or other formal means of communication could be helpful. If not, the AEGIS question will be moot," stated a US defense source close to the project.

Taiwan's political leadership and military staff officers, as well as many officials in the US government, are currently passive about the AEGIS issue. Taiwan must engage the US government before running out of time, the source said.

The source cited three reasons why Taiwan must move forward with the sale.

First, if US President George W. Bush loses the election in November, a Democratic administration is unlikely to release AEGIS destroyers.

Second, as the recently released US Department of Defense (DoD) report to Congress on Chinese military capabilities notes, there is a growing threat to Taiwan as Beijing increases the numbers of advanced naval platforms, air-combat aircraft and tactical ballistic missiles.

Third, in 2006 there could be a gap in production, as US shipyards will begin retooling for the next series of modern destroyers, possibly resulting in large-scale lay offs.

According to a Northrop Grumman source, "Our workload forecasting and PERT [Program Evaluation Review Technique] charts show that we will be wrapping up our last contracted DDG-51 for the US Navy at the end of 2006 or early 2007. Once that is done, we will shut down the assembly line. If anyone wants to purchase the DDG-51/AEGIS after we shut down the assembly and lay off the highly trained and skilled DDG-51 craftsmen and technicians, you can imagine the added costs involved. So, if anyone intends to buy this system, they should wisely sign up soon."

The US has been holding off on a final decision until Taiwan determines its own requirements. Taiwan's navy submitted an LOR for price and availability (P&A) data in the summer of 2002, but there was no response from the US, due to concern over Taiwan's domestic squabbling over Kidd-class destroyers.

"There was some concern Taiwan would not go forward with the Kidd sale, which the US considered necessary as interim platform for the AEGIS," stated the defense source. "If the US had approved the AEGIS sale during the Kidd debate, the Taiwanese likely would have canceled the acquisition of Kidd-class destroyers."

Now that the Kidd issue has been resolved and delivery is expected next year, the source said that the "likelihood of approval is high" for the AEGIS program, but "Taiwan has been suffering from paralysis due to political infighting."

However, the source cautioned there would be some opposition in the US. First, some officials in the State Department and within the National Security Council staff "fear crossing China's `red line,' or its threshold for tolerance," but according to the source, "this assertion is ridiculous in light of China's unprecedented military build-up."

Second, there are fears that Taiwan will have trouble affording the platforms. There are difficulties with the current attempt to acquire eight diesel-powered submarines, which, if the program falters, could lead to reallocation of the budget for AEGIS. US officials have privately suggested that Taiwan examine cheaper options, such as refurbished submarines, which could be as much as 20 percent of the cost currently estimated for eight new submarines. The intent is to free up funds for more pressing requirements, such as C4ISR upgrades, missile defense and anti-submarine warfare (ASW) surveillance equipment.

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