Iron Dome missile defense battery
Photo: Ido Erez
In midst of IDF operation, government delaying payments to defense firms
Prime Minister Netanyahu's government praises Iron Dome, Israeli UAVs – while carrying nearly $250 million in debt.
Even as senior government and security officials laud the performance of the Iron Dome missile defense system and other fighting measures supplied to the IDF by various defense contractors, Prime Minister Benjamin Netanyahu's government has been falling behind on their payment.
IAI is not the only player in the defense sector owed money by the government. "There is a delay in the payments from the defense ministry," Elbit's CEO told Ynet. While the debt remains unpaid, the defense ministry remains the single largest customer for Israel's domestic defense industry – even though the majority of their sales are now abroad.
The ministry did not address the debt to Elbit or other major defense manufacturers.
Israeli Aerospace Industries, which developed and manufactured the Iron Dome radar, is owed $249 million by the government, as opposed to $175 million at the end of April. The firm announced Sunday that the defense ministry has not paid IAI since April.
Iron Dome launching interceptor missile (Photo: AFP)
The government's delayed payments led to a negative cash flow in 4Q 2014, according to the company. Yet IAI's management does not believe it will have difficulty collecting the debt.
Iron Dome batteries near Tel Aviv (Photo: Motti Kimchi)
The defense ministry said that "an agreement was reached with IAI management on the distribution of payments, which was caused by the cuts to the defense budget. The conditions for debt repayment will be agreed separately in the coming weeks."
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But as Operation Protective Edge enters its seventh day, foreign buyers have renewed their interest in the Iron Dome missile defense system. The defense ministry and the IDF have received several inquiries from foreign military attaches requesting information on Iron Dome's performance against Hamas rockets during the operation.
IAI's Multi-Mission Radar (MMR), sold separately from the missile defense system, has also been acquired by the IDF's artillery corps and several foreign buyers – it identifies rocket launches and mortar fire.
Iron Dome interception over Tel Aviv (Photo: Yaron Brenner)
The MMR has also been highly successful in tracking hundreds of rockets launched by Hamas over the past week, which should increase its marketing potential to new customers.
Aside from the oft-publicized Iron Dome, the IDF also intensively uses the IAI's Heron unmanned aerial vehicles and Elbit's Hermes 450 UAV.
On Sunday the IAI announced that it was in advanced stages of negotiations to develop and sell military electronics for a foreign customer in a 5-year contract worth some $1.2 billion. IAI has also been expecting further orders for its early-warning planes from India, which has already purchased three at a cost of $1.1 billion.
