The US likely to strike a ground-breaking deal by the middle of next year to sell the UAE a multibillion-dollar Lockheed Martin Corp missile defence system, Lockheed's chief executive said.
The so-called Theater High Altitude Area Defense is being sought by UAE as a bulwark against short-, medium- and intermediate-range ballistic missiles that could be fired by Iran. It would be first overseas sale of the system and could be worth as much as $7 billion, the Pentagon's Defense Security Cooperation Agency has said.
The projected sale is "probably the most significant international order opportunity" among missile defense systems for now, Robert Stevens, Lockheed's chairman and chief executive told a webcast investors' conference.
He said he expects the government-to-government negotiations to wrap up in the first half of next year. "You should look for that as the next step in the international expansion of the missile defense portfolio," Stevens said.
The Pentagon's Missile Defense Agency, or MDA, has withheld from Lockheed a $419 million THAAD production contract because a part made by a subcontractor has yet to pass all qualification tests. Stevens was not asked about the holdup and did not discuss it.
The part in question, manufactured by Moog, is an "optical block switch" designed to prevent accidental missile launch.
Army Lieutenant General Patrick O'Reilly, the MDA chief, said on August 17 that Lockheed, the Pentagon's No. 1 supplier by sales, had offered to assume liability for any stop-and-restart production line costs pending completion of the switch's qualification, expected in February.
Lockheed, the Thaad programme's prime contractor, said it was confident that it had a solution in place that would clear the way for a production go-ahead this month.