The Defense Appropriations Bill for the 2010 fiscal year includes $122 million for the Arrow anti-ballistic missile program and $79.3 million for the Magic Wand (David's Sling) short-range anti-missile system, designed to intercept missiles at ranges of 40-250 kilometers.
However, in a document appended to the budget bill, the Missile Defense Agency (MDA) states that the technology and timetable for the Arrow 3, which has greater range and altitude than the current versions of the missile, are "high risk", even as it demonstrated better performance at lower cost compared with US anti-missile systems.
The 2010 budget allocation for the Arrow is more than the US administration originally asked for, as happens every year. The administration allotted $73.5 million for the Arrow, but Congress upped the allocation by $48.5 million to $122 million. The increase was the result of efforts by lobbyists and other interested parties, including Minister of Defense Ehud Barak, who met a Congressional delegation last April, and asked for more US participation in the Arrow 3 program.
The background to Barak's request was claims by US sources in early 2009 that the Arrow 3 was a "paper tiger". Israel was worried that the bad-mouthing of the Arrow 3 would cause the US administration to cut financing for it. Raytheon Inc. (NYSE: RTN), one of the pillars of the US defense industry, is developing a competing anti-missile program.
Israel's fears did not materialize, as reflected by the breakdown in US support for the Arrow in 2010:
- Development of the Arrow 3 - $50 million, $12.5 million more than the original amount requested by the administration, which was $7.5 more that the Bush administration asked for the program for the 2009 fiscal year.
- Development of the Arrow 2 - $47 million, $21 million more than the original $26 million requested by the administration.
- Joint production of the Arrow 2 by Israel Aerospace Industries Ltd. (IAI) (TASE: ARSP.B1) and Boeing Company (NYSE: BA) - $25 million, $10 million more than the original $15 million requested by the administration.
US support for the Arrow 2 is diminishing, as shown by administration funding requests for the program: 2006 fiscal year - $12.29 million; 2007 fiscal year - $117.49 million; 2008 fiscal year - $98.58 million; 2009 fiscal year - $74.34 million; and 2010 fiscal year - $36 million, including the joint production.
Sources inform ''Globes'' that that the crucial question that should be asked is whether Israel is satisfied. The answer is a categorical "yes". The sources added that the original amount requested by the administration had been coordinated with Israel, and the Congressional supplement was also in line with Israel's goals.
Published by Globes [online], Israel business news - www.globes-online.com - on January 7, 2010
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