TR TF-X KAAN Fighter Jet

[karakova]

When I drew attention to economic mismanagement (eg not dealing with inflation) I was not suggesting that the KAAN project would be cancelled. I was suggesting it would be difficult to find partners who would bring capital into the project.

Inflation is 61.5%
US$/lira exchange rate was 18.96 Turkish lira to the dollar 1 year ago. Now it costs 28.11 Turkish lira to buy a dollar.
Turkish central bank interest rate is 35%. EU rate is 4%

These numbers have significant repercussions. For example, whatever funding was set aside for KAAN will be eaten into by inflation. More funds will be required. How do suppliers price components that may take months to make if they have little idea of what it will cost to make them?

why ''it will be eaten into by inflation''....There is no such a thing

 

[Spitfire9]

why ''it will be eaten into by inflation''....There is no such a thing

Agreed. I should have said the value of the funds will be eaten into by inflation.

Let us say that in year 1 you budget a billion lira to buy x, y and z in year 2. In year 2 x, y and z have risen 60% in price so they cannot be bought for a billion lira. Inflation has eaten into the value of your budget.

 

[Baryshx]

When I drew attention to economic mismanagement (eg not dealing with inflation) I was not suggesting that the KAAN project would be cancelled. I was suggesting it would be difficult to find partners who would bring capital into the project.

Inflation is 61.5%
US$/lira exchange rate was 18.96 Turkish lira to the dollar 1 year ago. Now it costs 28.11 Turkish lira to buy a dollar.
Turkish central bank interest rate is 35%. EU rate is 4%

These numbers have significant repercussions. For example, whatever funding was set aside for KAAN will be eaten into by inflation. More funds will be required. How do suppliers price components that may take months to make if they have little idea of what it will cost to make them? If you invoice 1,000,000 lira and are paid 60 days later, that million lira has depreciated 10% in value by the time you are paid (it will buy 90% of what it would 60 days earlier).

Türkiye is a country that can afford 20 billion dollars even for a shitty dam, relax. Of course, the real cost of that dam was 700 million dollars, but that is a matter of law.

 

[godel44]

Agreed. I should have said the value of the funds will be eaten into by inflation.

Let us say that in year 1 you budget a billion lira to buy x, y and z in year 2. In year 2 x, y and z have risen 60% in price so they cannot be bought for a billion lira. Inflation has eaten into the value of your budget.

When you are funding a project like this, you don't generally put aside money like in a savings pot. You pay for or finance them as they arise and most of the heavy expenditures for Kaan were for infrastructure and they are mostly done already.

Also, inflation might be painful for ordinary citizens but for budgeting military expenditures the more relevant figure is GDP, which for Turkey has been increasing steadily in dollar terms, so keeping percentages same we should see an increase in the military budget in USD terms. The Turkish economy is big enough that the projected expenditures should not be cut ever. If there need to be budget cuts you can find many other costly but not really essential items.

A capital inflow from a trusted foreign partner would be welcome but is not really necessary. This project will go on even if only Turkey uses Kaan. At this point customers might be more helpful.

 

[Spitfire9]

Thanks to all for all the info.

Back to KAAN development, I heard that a different undercarriage was being developed. If that is correct, how far has that progressed? I have the impression that once that is sorted, the prototype will be ready for flight. How many days are usually needed for taxi tests and high speed ground runs on a new aircraft?

I look forward to seeing KAAN having its first flight at the end of December (weather permitting).

 

[neosinan]

Agreed. I should have said the value of the funds will be eaten into by inflation.

Let us say that in year 1 you budget a billion lira to buy x, y and z in year 2. In year 2 x, y and z have risen 60% in price so they cannot be bought for a billion lira. Inflation has eaten into the value of your budget.

Turkish economy always had over 10% inflation thus Every company that manage long term project which is most company, know how to include inflation to project cost. And Both side of the project is aware they need to account for inflation, Thus Original budgets are made with inflation and foreign exchange in mind thus Project budgets arent eaten by inflation. Though profit of main contractor or sub contractors can be eaten when inflation is higher or lower than estimated.

 

[TR_123456]

I know but something like this isnt done with willpower alone, this kind of thinking is dangerous.

No its not,think of the war of independence when we had nothing.
We had to fight all sides at once with even the women and children and fewer weapons.
We had to take loans/weapons from former enemies(Russia),got help from Muslims around the world.
If we hadnt done that we would have been another country in pieces,divided by the Western powers.
This is the same situation,if we dont make our own weapon systems and our indigenous engines to power them,we will be dependent on ''handouts'' by the West.
We dont eat or drink if necessary but we will finish these important projects.
Try not to think about government but about the country.

Why do you think the US can just support our enemy the PKK without us being able to do anything about it?
Every operations has been halted before it was finished because of threats by the US.
''You wont get anymore weapons if you dont stop,we will hurt your economy etc''
They already fucked our economy,the only ''card'' left is the weapon systems and engines(F-16's,missiles,bombs etc).
What happens when the KAAN and the engines are ready,then what card is left?
The table changes doesnt it,equal terms and different posture?
You should put the nation before anything else,forget politics.

 

[Bürküt]

Agreed. I should have said the value of the funds will be eaten into by inflation.

Let us say that in year 1 you budget a billion lira to buy x, y and z in year 2. In year 2 x, y and z have risen 60% in price so they cannot be bought for a billion lira. Inflation has eaten into the value of your budget.

Considering the importance of the project for our national security, I have no doubt that the necessary funds will be found.


But I hope that we will find strong financial partners for the project (KSA and UAE) and we will not have to push ourselves financially (which I said we would do if necessary).

 

[Spitfire9]

Considering the importance of the project for our national security, I have no doubt that the necessary funds will be found.


But I hope that we will find strong financial partners for the project (KSA and UAE) and we will not have to push ourselves financially (which I said we would do if necessary).

I read that the defence budget for next year will be increased enormously, to around 4% of GDP. No shortage of funding, it would seem. More, I wonder what it can all be spent on.

Turkey to allocate 150% more to defense budget in 2024 -minister

Turkey will allocate more than $40 billion to its defense budget in 2024, a presentation by a vice president showed, marking a 150% increase from this year's budget, in another move to bolster its defense capabilities.

www.reuters.com

 

[Ravager]

Let me reiterate once again .... Make it right and proper . You will find a " suprises " coming from " ummah " ....
No words need to be spoken ...only deeds matter .

 

[Rooxbar]

What will require a robust economy is not the cost of infrastructure, raw materials, components and human capital to build "one" prototype. It's the cost of all those things for dozens of squadrons, and then maintaining that fleet; a cost that even U.S. and European countries try to share among many countries. So partners will be necessary and I don't think their notion of Turkish economy's instability will be of any hindrance in their participation in the project, as this is not something you can risk not having; that is, especially, when you have no access to F-35s.

 

[Spitfire9]

What will require a robust economy is not the cost of infrastructure, raw materials, components and human capital to build "one" prototype. It's the cost of all those things for dozens of squadrons, and then maintaining that fleet; a cost that even U.S. and European countries try to share among many countries. So partners will be necessary and I don't think their notion of Turkish economy's instability will be of any hindrance in their participation in the project, as this is not something you can risk not having; that is, especially, when you have no access to F-35s.

Usually if you want a weapons system your country does not produce, you buy it. Why should countries wishing to buy KAAN invest in the programme?

Agreed, countries denied F-35 should be interested in the alternatives: KF-21, KAAN, AMCA (excluding Russian and Chinese types). I think that KAAN is in a good position

- more 5G than KF-21 (at least for the foreseeable future)
- ITAR problem solved when it gets an indigenous engine
- AMCA programme is a disorganised mess, won't be available for ages and may have lousy after sales support
- will be the preferred choice of some Islamic countries

 

[Rooxbar]

Usually if you want a weapons system your country does not produce, you buy it. Why should countries wishing to buy KAAN invest in the programme?

Isn't it obvious? Given the option of either being a mere buyer or a partner, many will go for the latter. I think almost all F-35 buyers would give their left nut to be in the programme instead of just being a buyer.

 

[Xenon54]

You should put the nation before anything else,forget politics.

Ok, i got the message, i will stop carrying this conversation from now on.

 

[Spitfire9]

Isn't it obvious? Given the option of either being a mere buyer or a partner, many will go for the latter. I think almost all F-35 buyers would give their left nut to be in the programme instead of just being a buyer.

I think you need to have the engineering expertise to build aviation standard components to be invited to build components for F-35. What countries in the market for KAAN have the engineering expertise to build components for aircraft?

 

[Zafer]

I think you need to have the engineering expertise to build aviation standard components to be invited to build components for F-35. What countries in the market for KAAN have te engineering expertise to build components for aircraft?

They may be looking for some technology transfer before they can contribute, which is okay.

 

[Ravager]

I think you need to have the engineering expertise to build aviation standard components to be invited to build components for F-35. What countries in the market for KAAN have the engineering expertise to build components for aircraft?

As long as you controlled/produced the core techs ( engines , sensor/radars , armament ) everything else could be outsourced off the shelf . Many nations are capable of producing/manufacturing such 2nd tiered techs .
And it might be at the fraction of turkey's cost ...

 

[BalkanTurk90]

I read that the defence budget for next year will be increased enormously, to around 4% of GDP. No shortage of funding, it would seem. More, I wonder what it can all be spent on.

Turkey to allocate 150% more to defense budget in 2024 -minister

Turkey will allocate more than $40 billion to its defense budget in 2024, a presentation by a vice president showed, marking a 150% increase from this year's budget, in another move to bolster its defense capabilities.

www.reuters.com

Its says 40 billion but real one is around 30 billion , they put aslo police budget inside defence one , i dont know how it works for other countries like france and USA .
So - 10 billion police budget

 

[Aqerdf]

https://twitter.com/i/web/status/1717841931147853894

 

[Spitfire9]

Its says 40 billion but real one is around 30 billion , they put aslo police budget inside defence one , i dont know how it works for other countries like france and USA .
So - 10 billion police budget

Even if the defence budget includes police costs, the 2024 budget is still planned to increase massively.

Could some of the increase be so that Turkey's MOD can buy dollars to secure the currency risk regarding the F-16 deal? Any other large procurements that need to be paid in US dollars? I see that the Turkish lira is predicted to drop heavily against the dollar in the next 2 years (2 year forward market rate is $1=54 lira against $1=28 lira now).

In UK defence and police budgets are separate. Police costs come out of the UK ministry of interior budget.