Poland signs deal to buy F-16 jets for $3.5 billion

DEBLIN, Poland -- Poland on Friday signed a deal to buy 48 U.S.-made F-16 jet fighters for $3.5 billion, the biggest defense contract by a former Soviet bloc country since the end of the Cold War.

Prime Minister Leszek Miller, who attended the signing ceremony, said the package reflected "our partnership with the United States in political and military areas, but also in the economy."

With its complexity and scope, the package underscored strong U.S.-Polish strategic ties, reinforced in recent months by Warsaw's help in war in Iraq.

While Warsaw's key European partners, especially Germany and France, opposed the Iraq war, Poland sided with the United States and contributed some 200 soldiers, including 56 members of its GROM special forces unit.

The Polish government announced in December it had chosen the U.S. government-backed offer over two rival European offers -- the Swedish-British Gripen jet and the French-made Mirage 2000. But negotiating the investment in the so-called offset deals took several more months.

Along with the purchase of planes from Lockheed Martin Corp., Polish and U.S. officials concluded an agreement setting out U.S. transfer of technology, investment in Poland and business deals with Polish manufacturers that the government valued at between $7.5 billion and $12 billion.

Polish Defense Minister Jerzy Szmajdzinski and U.S. Gen. Tome Walters completed the F-16 contract at the Polish Air Force Academy in Deblin, some 60 miles south of Warsaw. U.S. Ambassador Christopher Hill also attended the signing ceremony.

"Today we have a new quality and a new momentum in Polish-U.S. economic relations," Hill said, adding that the package "strengthens not only Poland's security but that of all of Europe, and the role of NATO."

Lockheed Martin, based in Bethesda, Md., will be replacing Poland's Soviet-made MiG fighters as the country modernizes its military to NATO standards. Poland joined NATO in 1999, along with Hungary and the Czech Republic.

The purchase contract specifies items of delivery including the Lockheed Martin aircraft, spare engines, missiles and bombs as well as technical details and the terms of training for Polish pilots. The aircraft will be built in Fort Worth, Texas, and deliveries will start in 2006.

Szmajdzinski spoke of "the contract of the century" at Friday's ceremony.

The offset program is to run over 10 years. Major projects include plans by General Motors to expand a plant in Gliwice, Poland, and a pledge by Motorola to invest in a state-of-the-art communication system for Polish public services.

Polish plants are to make engines and engine parts for Lockheed Martin and for Pratt & Whitney. U.S. companies, including a subsidiary of the Houston-based Halliburton Co., are to modernize a major refinery at Gdansk and cooperate with Polish pharmaceuticals makers.

Polish leaders hope the deals will create jobs and boost the economy, which slowed to about 1 percent growth last year.

"Today's event is good news for the Polish air force, it's good news for the Polish economy and for the future of our country," Miller said.

On Tuesday, Polish defense officials signed a $1.2 billion deal for the delivery of 690 Finnish-made troop carriers over the next 10 years.