The state-owned Israel Aircraft Industries (IAI) is expected to sign a full contract worth $574 million to upgrade 54 F-4 Phantom jets for the Defence Ministry. The contract was initialled recently, Ankara diplomats say (MEED 27:1:95)

Full signature is dependent on securing financial commitments from Israeli banks. The Israeli government has already pledged export credits for some 85 per cent of IAI's portion of the work.

IAI and its subcontractors will install new radar, computers, electronic counter-measures, weapons and navigation systems in the Turkish planes, using expertise gained through working on Israel's own F-4 upgrade, the Phantom 2000.

The deal was to have been worth around $1,000 million, but it had to be scaled down due to financial constraints. This meant eliminating some of the planned optional configurations for the aircraft. Nevertheless, it still represents IAI's single largest order ever, according to industry sources.

Turkey's F-4s date back to the 1960s and the IAI upgrade is expected to extend their operational lives by 20 years. The project, which is to be administered by the Defence Ministry's industry undersecretariat, will be carried out in both countries.

The deal was agreed during a state visit by Prime Minister Tansu Ciller to Israel, following a general expansion of relations with Israel in the wake of the Middle East peace accords (MEED 18:10:94).