Global Security Newswire

A U.S. defense manufacturer on Wednesday rebutted a news report that Taiwan's effort to acquire two more Patriot missile interceptor batteries was endangered by a budgetary shortfall, the Taipei Times reported (see GSN, Oct. 28).

The Chinese-language United Daily News reported on Monday that the Taiwanese armed forces have been challenged to find adequate sums to complete the deal approved by Washington in January 2010. The expense of the PAC-3 batteries reportedly surpassed anticipated levels by up to 40 percent.

Military insiders told the newspaper that Taipei had repeatedly pressed for a reduction in the cost of the PAC-3 firing units made by Raytheon. The article said the lobbying effort proved largely futile; Taiwan would have to increase funding to carry out the purchase to take place and a delay in the order was also possible.

The Obama administration advised Taiwan that if there is no forward movement on the matter before year's end, the current acquisition cost for the batteries might expire and future purchase requests could be more costly, according to the newspaper report.

A Raytheon official said it was his company's belief that the deal was still "on track."

An anonymous informed insider in the United States told the Taipei Times the deal was slated to be finalized this fall.

The Taiwanese government also dismissed the United Daily News report.

The batteries are a component of the $6.4 billion arms deal approved last year by the Obama White House, much to the ire of China, which claims Taiwan as its territory and opposes the sale of U.S. weaponry to the island's autonomous government.

The cost of the two Patriot batteries, a Patriot training system and 114 PAC-3 missile interceptors came to $2.8 billion. The deal follows the October 2008 U.S. approval for delivery to Taipei of four Patriot batteries and 330 PAC-3 interceptors valued at up to $3.1 billion (see GSN, Jan. 7, 2010).

Taiwan intends to deploy the initial four firing units no later than 2014. Raytheon is also at work updating the island nation's three PAC-2 firing units -- purchased two decades ago -- to PAC-3 capabilities (Michael Cole, Taipei Times, Aug. 18).

Meanwhile, U.S. Vice President Joseph Biden is in Beijing, where Washington's arms trade with Taiwan is expected to be on the agenda during meetings with Chinese officials, the Associated Press reported (Christopher Bodeen, Associated Press/Time, Aug. 18).