Because of production issues, missing the deadline could result in hundreds of millions of dollars in additional costs.

77877 9/11/2006 11:05:00 AM 06ISLAMABAD17992 Embassy Islamabad CONFIDENTIAL//NOFORN 06ISLAMABAD17768 VZCZCXYZ0010PP RUEHWEBDE RUEHIL #7992 2541105ZNY CCCCC ZZHP 111105Z SEP 06FM AMEMBASSY ISLAMABADTO RUEHC/SECSTATE WASHDC PRIORITY 0093RUEKJCS/SECDEF WASHINGTON DC PRIORITYINFO RUEKJCS/JOINT STAFF WASHINGTON DC PRIORITY C O N F I D E N T I A L ISLAMABAD 017992 SIPDIS NOFORN SIPDIS

FOR SCA, PM, H

E.O. 12958: DECL: 09/05/2016 TAGS: PK, PREL, MASS

SUBJECT: EMBASSY RECOMMENDATION ON ENGAGING GOP ON F-16 SALE

REF: ISLAMABAD 017768

Classified By: Ambassador Ryan Crocker. Reasons 1.4 (b) and (d)

1. (C) Summary: Post requests senior officials from SCA, PM, H, and OSD convene Pakistani Ambassador Durrani and reinforce the importance of the September 15 Offer Expiration Date (OED) for signing the F-16 Letter of Acceptance(LOA.) End Summary

2. (C) Over the weekend, Ambassador Crocker engaged President Musharraf's Chief of Staff, LTG Hamid Javaid, on the F-16 purchase agreement. (Note: The GOP had scheduled the LOA signing for September 9 but then last week canceled the ceremony and issued a set of new demands, detailed reftel.) The Ambassador stressed that the Offer Expiration Date was September 15 and that the GOP must understand there was no flexibility with that deadline. It was too late to be presenting new demands; missing the September 15 date would create potentially serious ramifications for the entire F-16 package agreement.

3. (C) Post believes it would be beneficial for senior officals from SCA, PM, H, and OSD to convene Ambassador Durrani and reiterate the points Ambassador Crocker made over the weekend. Following are those points:

-- It is too late to try to renegotiate the Letter of Acceptance. September 15 is a hard deadline. (Note: While we have heard the Defense Secrutiy Cooperation Agency might be able to extend the date to September 30, we most certainly are not/not mentioning that to GOP officials. End Note.)

-- Missing the deadline could have serious ramifications, both on this F-16 sale and on future defense purchases.

-- Lockheed Martin has offered you the best price possible. The offer of that price expires September 15. Do not think there is a better deal out there if the offer expires.

-- Because of production issues, missing the deadline could result in hundreds of millions of dollars in additional costs to you.

-- It is simply too late to be discussing off-sets or financing issues.

-- It is inappropriate to be making demands unrelated to the LOA.

-- The USG has been consistent in its position that Pakistan must have adequate national funding up front for the sale to proceed.

-- After the agreement is signed, the USG will continue to assist Pakistan on issues regarding the F-16 program.

CROCKER