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. Last Updated: 07/27/2016

Defense Ministry Refuses Sale of Arena Tank License

The Defense Ministry has blocked a deal to sell a license for Arena active-defensive tank systems to U.S. General Dynamics Land Systems that could have earned the defense industry tens of millions of dollars.

The General Staff of the Armed Forces refused to approve the sale of an Arena production license to GDLS, which planned to mount the systems on its Abrams tanks if the latter wins the tender for a main battle tank tender in Turkey, an officer at the Defense Ministry said Friday in a telephone interview

The officer, who declined to be named, said the sale has been blocked because the ministry believes GDLS should buy a "proper number" of Arenas before sale of a production license could be negotiated.

A delegation of GDLS officials visited Moscow last year for a round of talks on Arena with chief arms mediator Rosvooruzheniye and the system's designer, the Kolomna Engineering Design Bureau located at Kolomna in the Moscow region.

A senior official at the bureau, who declined to be named, said his company hopes to sell up to 1,000 Arena suites to GDLS if the latter wins the Turkish tender. The winner is to be announced this summer.

The Kolomna official would not give a price for Arena systems, but said the bureau expects Arena to account for roughly 10 per cent of the price of each Abrams tanks if GDLS wins the tender.

The sale of a license to produce 1,000 Arena suites would generate some $100 million for Rosvooruzheniye and the Kolomna bureau, said Konstantin Makiyenko, head of the Center for Analysis of Strategies and Technologies. He said it "would make sense" to sell at least dozens of the systems, which cost at least $200,000 each, before selling the production license.

Reached by telephone Monday, a Rosvooruzheniye official admitted the General Staff had blocked the sale of the Arena production license, but said negotiations will continue.

GDLS would neither confirm nor deny it was in talks with Rosvooruzheniye on possible purchase of Arena systems.