Diario Libre focuses today on the US$16-million loan being negotiated with the Israeli Bank Hapoalim BM for the purchase of two Super Dvora Mk2 speedboats and three radars for the Dominican Navy. The loan contract reportedly includes a clause that contemplates a third loan for US$1.2 million to insure the country risk. The contract approved by Congress does not specify the name of the insurance company, while it does indicate that the interest payment is LIBOR plus 2.5% with a repayment term of three years. Diario Libre comments that insurance on loans to governments is usually granted by the Multilateral Insurance Guarantee Agency (MIGA), of which the Dominican Republic is a member. Each of the three speedboats will cost Dominican taxpayers US$5.68 million and each radar El/M2129 will cost US$377,000. In addition, the country has contracted logistical support for both worth US$2.3 million. The terms of the loan with the Israeli bank are LIBOR + 1.5%, with a repayment term of nine years and a 2.5-year grace period.
The purchase is being justified by the government on grounds that the equipment will be used to guarantee maritime sovereignty, as well as assisting in the search, rescue and prevention of contraband and illegal acts. The loan contract was signed by Armed Forces Minister Jose Miguel Soto Jimenez with the Israeli firm Israel Aircraft Industries Ltd. (IAI) on 3 June 2003.
Despite a global and local economic crisis, the Mejia government has made military equipment purchases for more than US$235 million, including the speedboats mentioned here.