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US contractors eye gains from Polish shield deal
By Andrea Shalal-Esa
Wednesday August 20 2008

WASHINGTON, Aug 20 (Reuters) - Poland's agreement to host part of a U.S. missile shield for Europe should generate significant sales for American defense contractors, but critics say the whole effort amounts to a multibillion-dollar sham.

The United States has spent more than $120 billion on missile defenses over the past 25 years since former president Ronald Reagan's famous "Star Wars" speech in 1983.

The new system in Europe, which includes 10 interceptor rockets in Poland and a sophisticated radar complex in the Czech Republic, should cost another $4 billion over the next few years, according to the U.S. Missile Defense Agency.

Cost overruns typical in nearly every U.S. defense program could easily drive the price higher, said some defense analysts and critics of the missile defense program.

While details of any specific contract awards must still be worked out, the deal will clearly result in additional work for U.S. defense companies at a time when U.S. defense spending is expected to begin to level off.

But missile defense critics, including the former top U.S. weapons tester, Philip Coyle, say all that spending has produced scant progress.

The missile defense program has generated "a lot of profits for defense contractors ... but no real addition to U.S. security," said John Isaacs, who heads the Washington-based Center for Arms Control and Non-Proliferation.

Coyle said the new European missile defense system would do little -- if anything -- to protect Europe against enemy missile attacks.

"It's too easily overcome by an enemy," Coyle said, noting that even U.S. defense officials acknowledged that the system would be able to defend against one or two missiles launched from Iran, not dozens, and that current technologies would not be effective if they faced a swarm of decoy missiles.

"It's all a lot of sword-rattling,'s a sham," Coyle said.

The United States and Poland signed the agreement on Wednesday, over the strong opposition of Russia. The Czech Republic had previously agreed to participate. The parliaments of both Poland and the Czech Republic must approve the deals.

The European system is meant to defend Europe and the United States from a future missile threat from Iran, according to Washington.

Riki Ellison, president of the Missile Defense Advocacy Alliance, called the agreement with Poland a "phenomenal achievement" that reflected the growing threat of ballistic missiles.

He said U.S. efforts to develop integrated missile defenses had made huge strides over the past six years.


Chicago-based Boeing Co, prime contractor for the U.S. ground-based missile defense system, will supply the rockets to be placed in Poland, but the Army Corps of Engineers will manage construction of the site, a U.S. official said.

Boeing had no immediate comment on the potential value of the deal, but said in a statement that it would work closely with the U.S. military and its industry partners to extend missile defense capability to Europe.

Waltham, Massachusetts-based Raytheon Co built the powerful X-band radar now based in the Kwajalein Atoll in the Marshall Islands, which will be moved to the Czech Republic.

Bethesda, Maryland-based Lockheed Martin Corp said its system to integrate separate missile defense elements and provide a common view of the "battlespace", known as Command, Control, Battle Management and Communications (C2BMC), would play a key role in the European missile defense site.

But John Kelly, a top Lockheed official and former deputy director of the U.S. Missile Defense Agency, said it was not yet clear about the effect on company revenues, or whether the U.S.-Polish agreement would result in more sales of Lockheed's Patriot Advanced Capability (PAC-3) missiles.

"We just don't know yet. The ink is still wet," Kelly told reporters, noting it was not yet clear if the Patriot missile battery would come from existing U.S. stocks.

Raytheon, also prime contractor for the Patriot air and missile defense system, declined comment on any project sales resulting from the Polish agreement.

(Editing by Carol Bishopric)

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