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. Last Updated: 07/27/2016

Arms Exporter: Tender Unfair

For MTSukhoi may lose a key Singapore tender if the South Korea choice goes ahead.
KUALA LUMPUR, Malaysia -- Arms export agency Rosoboronexport, which lost a $4 billion South Korean fighter project on Tuesday questioned the selection process that it said was biased toward Boeing Co. of the United States.

"It's a political decision," a top official at Rosoboronexport said at an Asian defense show in the Malaysian capital of Kuala Lumpur, referring to the South Korean deal.

Seoul wrapped up two years of evaluations at the end of last month by announcing that the Rafale fighter aircraft from France's Dassault Aviation SA and Boeing's F-15K would go to a second review stage.

A winner for the 40-fighter deal is to be named in April. Russia's Sukhoi Su-35 and European consortium Eurofighter's Typhoon were knocked out of the bidding.

But last week, the Dassault-led French consortium asked a court to halt a selection process it called unfair.

Officials at Dassault say they should have been selected in the first phase of evaluation, where they offered a larger package of jobs and technology transfers.

Rosoboronexport deputy director-general Viktor Komardin told reporters in Malaysia that Boeing held an advantage over Dassault in the final phase of evaluation.

Komardin said South Korea was insisting that the new fighters must be compatible with the existing U.S.-made equipment such as landing or radar equipment being used by South Korea.

"It was a condition, so how can we fit to that part of the tender? So I think it's a political decision," he said.

"If the South Korean government thought about it beforehand, that this will be the main parameter, the key demand, then no one from any country, from France, from us will participate," he said.

"Dassault and the Americans are the two chosen for the second stage. Maybe Dassault can win but I think they will not."

The South Korean deal is crucial to Dassault, which has yet to sell its Rafale next-generation fighter outside France and has received fewer-than-expected orders from the French government.

There are 37,000 U.S. troops stationed in South Korea, and the two countries have maintained a close defense relationship since the Korean War 50 years ago.

South Korea expects about $3 billion in jobs and technology transfers from the fighter program which it hopes to use as a springboard for developing its own fighter by 2015.

Analysts have said Seoul's choice might also influence a pending decision from Singapore, which is also shopping for fighters.

Malaysia, also in the market, has been considering Russia's Sukhoi Su-30 or Boeing's F/A-18 E/F Super Hornets to build a new squadron of 16 planes.

But defense analysts said the two-horse race has been joined by latecomer Anglo-Swedish group BAE-Saab, which is offering its Jas 39 Gripen fighter jets.

"It came in quite recently, but it is considered an outsider," one said.