In September of 1989, plans were announced by Pakistan to acquire 60 more F-16A/Bs. A contract was signed in the same year under the Peace Gate III/IV Foreign Military Sales Programs, for the delivery of 60 F-16s for US $1.4 billion or approximately US $23 million a piece. (349 note: we'd appreciate it a lot if anyone could confirm these orders; do Peace Gate III ad IV amount to 60 aircraft, and how are these aircraft divided between Peace Gate III and Peace Gate IV; also, how many A's and B's were ordered ?) By March of 1994, 11 of these planes had been built and were directly flown into the Sonoran desert where they joined the 11 Peace Gate II aircraft in storage. A further six aircraft were stored by the end of 1994, so that a total of 17 aircraft (7 F-16A's and 10 F-16B's) of the Peace Gate III/IV order are now stored. A stop-work order affected the remaining 43 planes of the Peace Gate III/IV contract.
The Brown amendment later eased the restrictions on weapon exports to Pakistan, but specifically excluded the F-16s from this release.
Pakistan had already paid $685 million on the contract for the first 28 F-16s (11 Peace Gate II and 17 Peace Gate III/IV), and insisted on either having the planes it ordered delivered or getting its money back.
In March 1996, nine aircraft out of those which had already been manufactured for Pakistan, were sold to Indonesia. However, Indonesia canceled this order on June 2nd, 1997. This "unexpected" trouble with the Indonesian F-16 deal means a bigger problem to the Clinton administration both with respect to Pakistan and Indonesia. President Clinton had pledged to the Pakistan Prime Minister, Ms. Benazir Bhutto, that the money paid for the F-16s by Islamabad would be reimbursed if the equipment could not be delivered. In trying to come to terms with Islamabad's demand that Washington return the money the Clinton administration went on to see if the planes could be sold to a third country and the proceeds transferred. Interested buyers included amongst others the Republic of China.
At the end of 1997, with chances of finding a buyer close to zero, it was decided to take the PAF F-16s out of flyable hold and into the Boneyard. The airframes are still for sale, and have been offered to the Philippine Air Force, in view of its modernization plans.
In May 1998, a rumor suggested that the 28 Pakistani AF F-16A/B aircraft stored at the AMARC could possibly be donated to the Air Force of the Federation of Bosnia and Herzegovina, as a part of the US led "Train & Equip" program. As Pakistan is already taking part in this program (training Bosnian Army Anti-tank missile teams), this is a solution that could satisfy both sides in this long dispute.
After the detonation of five nuclear devices by India in May 1998, in a remote area close to its border with Pakistan, Washington feared that this might escalate the old border dispute between Pakistan and India to a full crisis. In order to keep Pakistan from responding to this challenge, US president Bill Clinton suggested that the 28 stored F-16s would be delivered after all, in batches of 1 or 2. However, the internal pressure on the government proved to strong and shortly after India's demonstration, Pakistan responded by detonating an unknown number of nuclear devices.
Finally, on December 1st, 1998, the New Zealand Government announced that it will lease-buy the 28 Pakistani F16s stored at the AMARC. Three days later, the United States said they hoped for an "early and fair" agreement on how to compensate Islamabad for its aborted purchase of U.S. F-16 fighters. President Clinton briefed Pakistani Prime Minister Nawaz Sharif on U.S. efforts to compensate Pakistan for the $658 million it paid for the 28 F-16s. U.S. officials said the United States has already paid $157 million of this back to Islamabad, raising the money by selling aircraft components to other countries. New Zealand agreed to pay some $105 million over 10 years to lease the fighters, providing additional funds that could be used to give Pakistan some of its money back.
At the end of 1998, the United States announced it would pay Pakistan $326.9 million in cash and up to $140 million in other compensation to settle the eight-year dispute. The $140 million will include about $60 million in U.S. white wheat that Pakistan will receive during the current U.S. fiscal year, which began on Oct. 1. The remaining $80 million in compensation will be negotiated by the two sides. The F-16 issue has been a headache for Pakistan, which is grappling to repay millions of dollars on its $32 billion in foreign debt amid a hard currency drought caused by sanctions and the suspension of International Monetary Fund programs. |