Costs Skyrocket for Taiwan’s Early Warning Radar

The price for further maintenance of Taiwan’s sole early warning radar (EWR) program just went through the roof. The Pentagon announced an additional maintenance contract on December 7 worth a whopping $290 million. Given the fact that the original price for construction of the EWR on Taiwan’s west coast was only $800 million, Taiwan legislators have already complained bitterly of extensive overruns hitting $1.23 billion.

The Raytheon built facility is designed to warn of an initial missile and air strike from China, which is aiming 1,500 short-range ballistic missiles at Taiwan.

The construction of the radar facility was delayed by mudslides on Leshan Mountain and further unspecified delays pushed costs up. The additional increase will no doubt upset many within Taiwan’s legislature and military who have been pushing for an increase in the defense budget to cover costs of paying for $18 billion worth of arms procured from the U.S. since 2007. 

The list is extensive: AH-64 Apache attack helicopters, Patriot Advanced Capability 3 (PAC-3) missiles, P-3C Orion maritime patrol aircraft, UH-60M Blackhawk utility helicopters, F-16A/B upgrade package for 145 fighters, Osprey-class mine hunting ships, AMRAAM missiles, SM-2 Block IIIA Standard air-defense missiles for Kidd-class destroyers, Harpoon anti-ship missile, etc.

See Shirley Kan’s most recent report on Taiwan’s arms procurement programs in her new report: Taiwan: Major U.S. Arms Sales Since 1990.

“However, Taiwan complained of mistrust, delays, and price increases for the SRP (and other programs). The U.S. Air Force unexpectedly asked Taiwan to agree to two revised Letters of Offer and Acceptance for two additional payments of about $141 million (requested in December 2007 to cover costs in disaster response) and about $56 million (requested in June 2009 to enhance anti-tampering). In 2011, Raytheon requested a third increase of about $200 million. While officials in Taiwan, including in the LY and Taiwan’s military, expressed frustration at the extra U.S. demands, they said they remained committed to the SRP.”

Below is the original DoD December 7th announcement:

Raytheon Co., Sudbury, Mass., (FA8730-13-C-0003) is being awarded a $289,458,942 cost-plus-fixed-fee, firm-fixed-price, cost reimbursement contract for follow-on sustainment support of the Taiwan Surveillance Radar Program. The location of the performance is Taiwan. Work is expected to be completed by Nov. 8, 2017. The contracting activity is AFLCMC/HBNA, Hanscom Air Force Base, Mass. Contract involves foreign military sales to Taiwan.