A few weeks after Minister of Defense Avigdor Liberman approved the decision by the professional staff in his ministry to select the artillery made by Elbit Systems Ltd. (Nasdaq: ESLT; TASE: ESLT), a trial of the cannon conducted two weeks ago in southern Israel ended with disappointing results.
Sources inform "Globes" that the trial of the new ATMOS cannon selected by the Ministry of Defense at the end of a controversial procedure was halted. Some of the capabilities of its automatic loading system were not demonstrated at all to representatives of the Ministry of Defense Administration for the Development of Weapons and Technological Infrastructure and IDF artillery corps officers.
Earlier models of the ATMOS were sold by Elbit Systems to several armies around the world in recent years. In the framework of the proceeding conducted by the Ministry of Defense over the past year, the Administration for the Development of Weapons and Technological Infrastructure developers' committee selected Elbit Systems' artillery after being promised that various adjustments would be made according to the IDF's future operational requirements.
In this decision, the Ministry of Defense rejected other offers to purchase cannons made by German company KMW and South Korean company Hanwha Techwin that had already proved their operational capabilities. Both of these foreign companies combined with Israeli defense companies for the purpose of gaining a possible deal with Israel: KMW with Israel Aerospace Industries Ltd. (IAI) (TASE: ARSP.B1) and Israel Military Industries Ltd. (IMI), and Hanwha Techwin with IMI. The two partnerships offered to carry out serial production of their proposed artillery in Israel.
Despite these efforts, however, the Ministry of Defense refused to conduct a tender, and selected the bid by Elbit Systems, which ensured that production of the cannon would be done in in the Soltam plant in Yokneam, thereby ensuring that many jobs would be created in northern Israel. The Ministry of Defense preferred to grant Elbit Systems "sole supplier" status, and refused to disclose the considerations that led to its decision.
Sources involved in the Ministry of Defense's decision-making process for the artillery program have already asserted in the past, "The cannon selected is a cannon on paper," because some of its systems are still in the development stage, and it will take a long time to adapt them to the IDF's specifications.
"Some of the capabilities were not demonstrated"
Following the results of the trial of the artillery conducted two weeks ago, one of the sources told "Globes," "Things didn't work. It's clear that the entire development program is being accompanied by a long series of trials, in which there are both successes and failures. In this case, however, it is impossible to ignore the fact that Israel could have procured artillery with an automated loading system that has already demonstrated its operational capabilities in the field. It is unclear how much time the process of developing Elbit Systems' cannon, with all the additions that the IDF wants, will take."
The cost of procuring Elbit's new artillery was estimated at $1.5 billion. In response to a question from "Globes" about the defects found in the demonstration two weeks ago, Elbit Systems said, "No response." The Ministry of Defense said, "As part of the development of a prototype for mobile artillery, trials and demonstrations are taking place in order to test the developed capabilities. This is the prevailing practice in the development process, and additional trials and demonstrations will be conducted in the future that will fully demonstrate all of the capabilities."
At the same time, a defense source claimed, "A very successful demonstration of the cannon was held a month ago, and another demonstration was held two weeks ago, in which a number of the artillery's capabilities were presented, some of which were not fully demonstrated, due to a specific problem that has been corrected."
Sources said, "No further trial of the artillery has been held since this problem was corrected."
In a series of statements on the subject to "Globes," the Ministry of Defense stated, "After receiving and analyzing many professional opinions from all the relevant parties in the defense establishment, the Administration for the Development of Weapons and Technological Infrastructure developers' committee submitted a thick classified document, in which it recommends carrying out the project at the artillery factory of Elbit Systems (formerly of Soltam) - the only one in Israel capable of supply the systems according to the IDF operational requirements. The committee's recommendations and their approval were according to law."
Elbit Systems' ATMOS artillery is designed to replace the US-made M-109 guns currently used by the IDF artillery corps in the coming years. The IDF has wanted to replace the outmoded M-109 for many years.
Published by Globes [online], Israel Business News - www.globes-online.com - on September 3, 2017
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