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Turk tank prototype passes tests, moves to serial production

March 29, 2017 (Photo Credit: Jacques Demarthon/AFP via Getty Images)
ANKARA—The prototype of the Altay, an indigenous Turkish new-generation tank in the making, has successfully passed all acceptance tests, said its builder, Otokar.
 
“Altay … has now completed the tough qualification testing stage, including mobility and endurance testing on rough terrain and climatic conditions, firing tests with various scenarios and survivability testing,” the company said.
 
Serdar Gorguc, Otokar’s general manager, said: “The acceptance tests … for [the] Altay are finalized. After … meeting the ultimate requirements under extreme conditions successfully, we are confident that [the] Altay will be one of the best modern main battle tanks on the field very soon.”
 
Gorguc also hinted at export potential for the Altay: “In addition to producing 250 units of [the] Altay, Otokar made an annual capacity plan taking into consideration the export potential, mine clearance, and various complementary vehicle requirements such as rescue and fortification tank. In this way, it aims to have a flexible production program that can meet all demands of [Turkey] or other friendly allied countries.”
 
The government’s procurement agency, the Undersecretariat for Defense Industries (SSM), will now decide whether it will award the serial production contract, worth billions of dollars, to Otokar or launch a competition.

Procurement officials say all options are open. “Competition is not an unlikely option,” said one senior official familiar with the Altay program. “We might also consider bringing together more than one player and go for a consortium-like solution.”
 
Armored-vehicles specialist Otokar, Turkey’s biggest privately-owned defense company, signed in 2008 a $500 million contract with SSM for the development and production of four prototypes of the Altay.
 
Under the various clauses of the development contract, Otokar, without competition, was to make an offer for the serial production contract. If Otokar’s offer was to be found satisfactory there would be no competition. If, however, the procurement bureaucracy was not content with the offer, then it had all the legal rights to launch competition for serial production of the Altay.
 
In January 2016, Otokar officially submitted its bid for serial production of a first batch of 250 Altay tanks and integrated logistical support for the program. And in August 2016 it revised its bid and submitted its best and final offer (BAFO) to SSM. Sources said at the time Otokar’s original bid was “surprisingly high.”
 
SSM’s looming decision on whether to go with Otokar or open competition will shape the Altay and its future sales, both to the Turkish army and potentially to foreign “friendly and allied” armies.

One potential rival to Otokar is BMC whose owner, businessman Ethem Sancak, is known to be a close friend of Turkey’s authoritarian president, Recep Tayyip Erdogan. A Qatari investment fund owns 50 percent of BMC. Another candidate, especially if the Ankara government decides to go for the consortium option, is FNSS, another armored vehicle specialist and a partnership between Turkey’s Nurol company and BAE Systems.
 
In August 2016, precisely when Otokar submitted its final offer, BMC, Germany’s Rheinmetall AG and the Malaysia-based Etika Strategi announced a Turkey-based joint venture for cooperation in armored solutions. The companies said that the joint venture would focus on wheeled and tracked armored vehicles. BMC officials said they also aim to win the Altay serial production contract.
 
The Altay program involves the production of 1,000 tanks, with an initial batch of 250 to be produced within five years. Under the program, Turkey’s military electronics specialist Aselsan is the subcontractor for the fire-control system and the command, control and communications suite. Also, state-owned MKEK was selected as the subcontractor for the 120 mm primary weapon, while Roketsan will provide the armor.
 
Otokar announced March 24 that its sales in 2016 rose by 14 percent to 1.6 billion liras (approximately $440 million). Its exports in 2016 sat at $145 million. In February, Otokar signed a deal in the United Arab Emirates (UAE) for the production of 400 8x8 armored vehicles, worth $661 million.
 
The contract will be undertaken by Al Jasoor Heavy Vehicles Industries, a joint venture between Otokar and UAE’s Tawazun. The deal is the biggest ever single foreign contract won by a Turkish company. To boost exports in the Gulf region Otokar in 2016 launched its UAE subsidiary, Otokar Land Systems Ltd.
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