Scandal, Cost Are Stalling Radar Deal

Brazil intends to extend a contract with Raytheon Co. for a $1.4 billion radar system to monitor the Amazon jungle while Congress debates the cost and a brewing scandal over how the deal was awarded, the government said Thursday.

The contract, signed in May, expired Wednesday with its proposed financing package stalled in the Senate’s Economic Affairs Committee, where opposition is growing.

Presidential spokesman Sergio Amaral said a clause in the government’s contract with the Lexington, Mass.-based company allows for both parties to extend the deal in the event Congress delays voting on the financing.

“The contract provides for the possibility of an extension of the deadline if it is in the interests of both sides,” he said. “The air force ministry and Raytheon are studying this matter.”

By extending the deadline, Brazil can avoid a $7 million penalty to the U.S. government Export-Import Bank for failing to complete the deal, he said.

The Amazon Surveillance System is intended to track airplanes, detect smugglers, and pinpoint wildfires in the largely unmonitored rain forest using radar, satellites and infrared sensors on planes and helicopters.

But final approval of the contract faces an uphill battle in the Senate, where it had been stalled amid arguments over its cost.

The deal ran into more problems following the disclosure last week of a taped phone conversation in which a presidential aide discussed a possible bribe with a Raytheon sales representative.