Brazil buys French helicopters and subs in a $12 billion defence pact

12:09 GMT, January 7, 2009 In the very last days of 2008, France and Brazil announced that their respective governments have finalised an agreement on a huge defense deal worth a cumulative € 8.8 billion ($11.9 billion). The deal, which is reported having been clinched at President's level between Nicolas Sarkozy and Ignacio Lula da Silva, includes two separated elements. In the first element, announced December 23, the Brazilian government signed a contract with a consortium formed by Eurocopter and Helibras on the local production of 50 EC-725 military transport helicopters (see: http://www.defpro.com/news/details/4588/). The second contract was signed with DCNS and Odebrecht for four conventional diesel-electric submarines and a nuclear-powered boat (see: http://www.defpro.com/news/details/4594/), to be built in a new yard to be created at Rio. Both contracts involve significant transfers of technology to foster the further growth of the national defence industry.


Helicopters

The helicopter contract was signed by the Commander of the Brazilian Air Force, Lieutenant-General Juniti Saito, representing the three Armed Forces and the chief executives of Helibras Brazil Helicopter Company and Eurocopter, respectively Jean-Noël Hardy and Mr. Lutz Bertling.

The 50 EC-725 helicopters will be built in a variety of versions and configurations for the Army Aviation (16), the Naval Aviation (16) and the Air Force (18), with deliveries expected to start in 2010. Brazil thus stands to become the largest operator of the EC-725 model, which is also in service with the French Air Force and several other countries.

The assembly work will be carried out by Helibras, which is owned 45% by Eurocopter (a daughter company of EADS) at its Itajuba factory, in Minas Gerais state, while their turboshafts will be built at Turbomeca‘s facility in Rio de Janeiro. A substantial part of the avionics will also be built in Brazil.

This historic contract is part of the joint declaration on defense cooperation signed by the French and Brazilian defense secretaries on June 30, 2008 – a date which also marked the 30th anniversary of Helibras. Eurocopter said that at $2.6 billion, this is the biggest helicopter contract ever signed in South America.

“This is an important achievement for Eurocopter, Helibras and the Brazilian government,” announced Eurocopter President Lutz Bertling. “This contract is the result of the close industrial partnership and the long-standing relationship that we have with Brazil, and we are particularly proud that the EC725s will be produced in this country. This contract heralds a new era for Helibras, which will become an outstanding center of aeronautical excellence in South America.”

Louis Gallois, CEO of EADS, Eurocopter‘s mother company, added: „EADS considers Brazil as a priority country in its long term partnership strategy. Our group has been developing its different activities there for many years: Airbus, ATR, military transport aircraft, space and security equipments. This major contract is fully in line with our strategy“.

The EC725 is the latest addition to the Cougar family. Prior to the signing of this contract, 96 EC725 and EC225 helicopters (its civil version) had been ordered by 17 different countries. The EC725 is a twin-engine helicopter with a five-bladed main rotor in the medium-lift category (11 metric tons). The aircraft has an exceptional fuel capacity and boasts a flight endurance of five-and-a-half hours. The EC725 has been designed to perform various missions, including combat search and rescue, long distance tactical transport, emergency medical services, logistics support, and naval assignments. It was this multi-role capability that made the EC725 the logical choice for the Brazilian armed forces.


Submarines

The $9.3 billion submarine contract covers the establishment with French assistance of a new shipyard in Rio. DCNS will manage the yard until completion of the programme, after which control will revert to the Brazilian authorities. The yard will be responsible for two distinct programmes:

• Four diesel-electric submarines, to be designed by DCNS based on the Scorpene type and incorporating the specific requirements of the Brazilian Navy. The first submarine is scheduled to enter active service in 2015;

• A nuclear-powered attack submarine (SSN).
DCNS will act as prime contractor for the four conventional-propulsion submarines to be built by the Joint Venture that will be set up by DCNS and Brazilian partner Odebrecht. The submarines will be designed in cooperation with Brazilian teams under DCNS design authority to meet the Brazilian Navy‘s specific needs: They will be ideally suited to the protection and defence of the country‘s 8,500-kilometre coast. DCNS will produce key advanced-technology equipment in its own plants.

DCNS will also provide design assistance under the Brazilian Navy’s design authority - for the non-nuclear part of the Navy‘s first nuclear submarine, which will be built by the Joint Venture to be set up by DCNS and Odebrecht. The entire nuclear power plant will be designed and built in Brazil, based on a $880 million investment programme approved last year.

Finally, DCNS will provide prime contractor assistance to Odebrecht for the construction of the naval shipyard that will build the five submarines covered by today‘s contract, as well as a naval base for the Brazilian Navy.

DCNS Chairman & CEO Jean-Marie Poimboeuf commented: „We welcome the decision by Brazil‘s highest authorities in favour of DCNS and our Brazilian partner, the Odebrecht Group. This success confirms our capabilities as an overall prime contractor, as well as our technological and competitive standing on the international market. It also confirms our ability to establish partnerships to handle in-country project work, just as we have done in other countries around the world.”


Fighters too?

The strong strategic partnership between France and Brazil that is being created through this twin agreements could also influence the outcome of the ongoing FX-2 competition for the procurement of 36 (+40 options) new-generation multi-role fighter. The Dassault Rafale was shortlisted in October 2008 together with the Boeing F-18 E/F Super Hornet and the Saab Gripen NG, and a decision is expected later this year.

Given the top-level agreement clearly in place between the two Presidents, many commentors expect the Rafale to be the most likely choice. However, Defence Minister Nelson Jobim said that the tender is totally open. Each of the three finalists offers "engineering of the highest sophistication," he said to Agencia Estado.


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By Luca Bonsignore, Publisher


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Related article:

Brazil selects F-18E/F, Rafale and Gripen in fighter jet bid
http://www.defpro.com/daily/details/142/