Controversial Israeli weapons company awarded $917 million Australian army contract

Elbit Systems says it will provide “advanced protection, fighting capabilities and sensors” for new Korean-designed Infantry Fighting Vehicles. (ADF: CPL Sagi Biderman)

An Israeli company whose technology was stripped from Australian Army equipment over possible data security concerns three years ago has been awarded a fresh defence contract worth $917 million.

Elbit Systems has confirmed it will provide “advanced protection, fighting capabilities and sensors” for new Korean-designed Infantry Fighting Vehicles (IFVs) being constructed in the Victorian electorate of Defence Minister Richard Marles.

In July last year, South Korean company Hanwha clinched the approximately $10 billion LAND 400 Phase 3 Project to deliver 129 of its Redback IFVs to the Army, beating a rival bid from German company Rheinmetall.

Originally Hanwha had partnered with Canberra-based defence company Electro Optic Systems (EOS) to produce a high-tech turret for its IFV, but the arrangement was broken off in favour of a joint venture struck with Elbit Systems in June 2022.

In a statement issued from its headquarters in the city of Haifa, Elbit Systems stated it had been “awarded a contract worth approximately $600 million [in US dollars, or $917 million] to supply systems to Hanwha Defence Australia for the Australian LAND 400 Phase 3 Project”.

“This project aims to deliver advanced protection, fighting capabilities and sensors suite to the Redback Infantry Fighting Vehicles (IFV) for the Australian Army”, the company said, while revealing the contract would be performed “over a period of five years”.

“This milestone reaffirms our commitment to delivering advanced, mission-critical solutions to the Australian Army,” Elbit Systems President and CEO Bezhalel (Butzi) Machlis said.

“Elbit Systems is dedicated to supplying cutting-edge defence technologies that will safeguard troops on the modern battlefield,” Mr Machlis added in the brief company statement issued this week.

The company has not publicly disclosed where Elbit System’s advanced turret systems will be produced and assembled but sources inside the LAND 400 Phase 3 program insist the plan is to do “most of the work in Australia”.

In 2021 the ABC revealed army headquarters had issued a directive ordering a “cease use” of another Elbit product, the BMS Command and Control (BMS-C2) in favour of an interim Danish system that remains in use today.

At the time Elbit Systems “strongly denied” security rumours about its BMS product after military sources suggested concerns about the technology possibly compromising sensitive data had triggered a directive that it “not be configured or accessed” on certain Army systems.

A Defence Department spokesperson insists it “works closely with industry partners to ensure that all contractual obligations, including security requirements, are met”.

Earlier this year the ABC revealed disquiet in the defence industry sector over the Australian government’s apparent reluctance to approve exports of locally made military equipment to Israel since the beginning of the Gaza war.