Missile repair plants wait for approval

Idex Focus: The US missile company Raytheon has submitted the proposals as part of the UAE Government's offset programme, to build two missile maintenance facilities in joint partnerships with UAE companies.

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Raytheon, the world's biggest missile maker, is awaiting approval to build two missile maintenance facilities in joint partnerships with companies in the UAE.

The US missile company has submitted the proposals as part of the UAE Government's offset programme, which was launched last year.

Offsets require defence companies to contribute to the UAE economy in exchange for arms contracts.

Kevin Massengill, the Raytheon vice president and executive for the MENA region, yesterday said he expected the Offset Program Bureau, the state-backed development agency responsible for implementing the offset framework, to approve the two missile maintenance centres.

Raytheon has extended its offset proposal to two missile facilities after originally mooting last year that it would build one facility.

The latest deal is a joint venture with Abu Dhabi Ship Building, an affiliate of Mubadala Development, to build a maritime intermediate level maintenance facility for missiles used by the UAE Navy.

The second agreement is a joint-partnership with Global Aerospace Logistics, part of Emirates Advanced Investment, and Lockheed Martin to build a consolidated facility for Patriot missiles.

In 2008, Raytheon signed a deal with the UAE worth up to US$3.8 billion (Dh13.95bn) for the Patriot missile defence shield, with the first deliveries expected in the middle of next year.

The contract was a major coup for the company, representing its first new order for the missiles since 1999. "These deals are absolutely essential for us as they help us plant the flag and show we are here for the long run," Mr Massengill said.

The Patriot system will gradually replace the UAE's battery of Hawk defensive missiles bought in the late 1980s, also manufactured by Raytheon.

Both projects would be "government-focused", Mr Massengill said, with a transfer of expertise from the US to the UAE.

"Having the industrial partnerships is essential to the development of the UAE's defence," he said.

Raytheon was the first international defence company to sign a new long-term agreement for the upgraded offset system that was introduced last summer, representing the first major reform of the policy in 18 years.

Offsets now feature in more than 100 countries.

Boeing, Raytheon, EADS, Fincantieri, Nexter, MBDA, Lockheed Martin and Rheinmetall have now also all signed up to the UAE reforms.

"Offsets is how you get knowledge transfer, technology transfer and job creation," Mr Massengill said.

Raytheon is also pursuing other contracts in the Middle East valued at billions of dollars this year, he said.

Major infrastructure projects such as the Al Raha Beach residential project and the Dolphin gas pipeline were facilitated by offset deals.

The offsets bureau is keen to build capacity for the making of end-user products such as strategic technical systems, infrastructure, transport equipment, and oil and gas systems.

A spokesman for Mubadala Development, a strategic investment company owned by the Abu Dhabi Government, said: "Mubadala and its subsidiaries are always in discussions with a range of organisations. However, we are not in a position to comment any further."