ANKARA, Turkey — Turkey’s defense procurement authority has officially launched a competition for a program designed to develop and later build a power group for the Altay, the Turkish indigenous tank in the making.

The Undersecretariat for Defense Industries, or SSM, invited local engine makers to develop the “power group” consisting of an engine and transmission system for the Altay.

“This will be a contract worth well over $1 billion,” an industry source said. “All the same, it will be quite a challenge for Turkey’s local industry to develop and produce the power pack [group] on a price-efficient and timely basis.”

SSM’s invitation to bidding requires local firms to develop the power group for the Altay “with maximum local input and minimum foreign technology.” It says the program aims to end Turkey’s dependency on foreign power technology in the Altay program.

Turkish engine-maker Tumosan won in 2015 a $100 million contract to develop an engine for the Altay. It then signed up a know-how deal with Austrian firm AVL List GmbH. But in 2016, this key technical support contract was canceled as part of Austria’s arms embargo on Turkey.

Last month, Turkish procurement officials said they were in talks with the British-based European division of U.S. company Caterpillar over a plan to produce and supply an engine for the Altay. Caterpillar and its U.K.-based partner, engine-maker Perkins, have expressed interest in the power pack for the Altay program.

Under the Altay program, Turkey aims to produce an initial batch of 250 tanks, eventually reaching 1,000 units. The Turkish government obtained serial production bids from three manufacturers: Otokar, BMC and FNSS.

The industry expects the government to select a bidder in 2018.