Turkish opposition lawmakers have criticized Defense Minister Hulusi Akar over a contract signed with military vehicle producer BMC, a joint Turkish-Qatari venture, for the mass production of the Altay tank.
Deputies from the main opposition Republican People’s Party (CHP) asked Akar the reason behind delaying the production of the country’s first indigenous Altay tank, during a meeting of parliament’s Planning and Budget Committee on November 12, 2020.
The production of 250 Altay tanks was due to be completed just 18 months after the signing of a multibillion-dollar contract by the Turkish government and BMC in November 2018, but BMC has not delivered the tanks to the Turkish Armed Forces despite the fact that the date has already passed, lawmakers Bülent Kuşoğlu, Mehmet Ali Çelebi, Mehmet Bekaroğlu and Süleyman Girgin stated in the meeting.
Defense Minister Akar, appearing before the committee to present the case for the ministry’s increased budget for 2021, did not respond to the opposition deputies.
According to the Altay deal, the first tank was expected to roll off the assembly line within 18 months and be delivered to the Turkish Land Forces by BMC. The contract included mass production and life-cycle logistical support for 250 units. The Altay project is Turkey’s first main battle tank development program, which includes electronic command and control systems, a 120-millimeter gun and armor, all of which will be made by Turkish defense companies. The Altay project has been beset by critical technology problems that have impacted its production timeline.
After the signing of the Altay projects with BMC in 2018, the Turkish government was accused by opposition groups of favoring the Turkish-Qatari joint venture owned by Turkish businessmen Ethem Sancak, who sits on the ruling Justice and Development Party’s (AKP) executive board, and the Öztürk family, distant relatives of President Recep Tayyip Erdoğan, as well as Qatar. A full 49.9 percent of BMC’s shares belong to Qatar, while Sancak owns 25 percent and the Öztürk family (Ahmet Öztürk, Talip Öztürk and Taha Yasin Öztürk) owns 25.1 percent.
Sancak is a businessman close to Erdoğan who once declared he was in spiritual love with Erdoğan. He has been an important figure in the Turkish defense industry since 2014. The Savings Deposit Insurance Fund (TMSF) handed over vehicle maker BMC to his company in 2014. BMC was originally owned by Cukurova Holding but was seized by the government in 2013 and sold to Sancak at a highly discounted price, while the company’s debts were paid by taxpayers.
The company has received a steady stream of contracts from the Turkish government since then, and won the contract to build the Altay tanks in a tender against Koç Holding, the conglomerate that built the prototype of the tanks. Then, a tank and pallet factory belonging to the Turkish military was also transferred to BMC for 25 years by Erdoğan in January 2019.
The factory, established in 1975 and operated under the 1st Central Maintenance Factory Management in the Land Forces Command, manufactured artillery, howitzers, ammunition carriers and tracks for tanks and other military carriers. The factory was also modernizing the Leopard 1, 2 and other tanks. Roughly 1,000 workers were employed at the factory, and unions as well as opposition parties expressed concern over their job security after the transfer to BMC.
Turkey’s major indigenous defense programs such as the Altay tank and the ATAK combat helicopter could face significant delays over the denial of engine technology by European firms. BMC was planning to power the Altay with the German MTU engine and RENK transmission but did not receive the German products due to objections of technology transfer from Germany.
According to DefenseNews, BMC has been in talks with Hyundai Rotem to solve problems surrounding the missing foreign technology for the Altay, and in indirect talks, through Hyundai Rotem, with two South Korean defense technology concerns: engine-maker Doosan and S&T Dynamics, which produces automatic transmissions.
BMC was also not the original firm involved in the Altay tank project, which was developed by Otokar, a subsidiary of Koç Holding, one of Turkey’s largest industrial groups. The Turkish National Main Battle Tank Project (Milli Tank Üretim Projesi ALTAY or MITÜP Altay) began in 2005. Otokar was chosen as the main contractor in 2007 for Altay’s design, prototyping and qualification process, referred to as Phase 1.
Otokar spent nine years on research and development of the tank and submitted its proposal. However, months after the prototypes were displayed, the Presidency of Defense Industries (Savunma Sanayii Başkanlığı, or SSB) announced in August 2016 that Otokar’s bid to produce the tanks had been rejected. Instead, in April 2018, the $3.5 billion contract to build 250 Altay tanks went to BMC, when which was chosen over Otokar, and another defense firm, FSSN.