Brazil to delay decision on new air force jets


Brazil’s government has postponed a decision on a key jet fighter contract worth more than US$4 billion until President-elect Dilma Rousseff takes office next year.

Brazil is in the final stages of picking a company to manufacture at least 36 jets, which are to be assembled locally.

The deal is hotly disputed — international defense contractors are hoping to capitalize from Brazil’s growing defense spending — and could eventually rise to include more than 100 aircraft. The finalists are the Gripen NG made by Sweden’s Saab, the F-18 made by US-based Boeing Co, and the Rafale made by Dassault, Reuters reports.

The administration of current President Luiz Inacio Lula da Silva has repeatedly expressed its political preference for the Rafale jet, in part because it sees the French as offering the most generous transfer of technology.

Yet Lula said during an interview with TV Brasil late on Monday that he would leave the decision up to his successor, Rousseff, who will take office on Jan. 1. Some analysts say Brazil is using the deal as a bargaining chip to help pressure France to agree to agricultural subsidy cuts as part of trade negotiations between the European Union and South America’s Mercosur bloc.

The delay could open the door to a new wave of lobbying and presentation of technical proposals by the companies involved. Rousseff plans to reevaluate the technical proposals made by all the parties before making her final decision, a source with knowledge of the decision told Reuters on Tuesday.

Brazil has signed a strategic defense agreement with France worth billions of dollars, which includes the local assembly of helicopters and conventional and nuclear-powered submarines. Latin America’s largest country is looking for a generous technology transfer offer and local assembly as part of the deal.

Brazilian governments have been postponing the decision for years, trying to balance the need for new jets against political considerations as well as the desire to obtain proprietary technology from companies as part of the deal.