When Poland chose US Lockheed Martin F-16 fighter jets last week for a 3.5-billion-dollar (-euro) contract to replace its ageing Soviet MiG-21 fleet, it selected more than just a plane.

In choosing the US aeronautics giant against its rivals, British-Swedish consortium BAE Systems-SAAB and France's Dassault Aviation, it also accepted Lockheed Martin's offer of a 9.8-billion-dollar investment package to boost its economy.

Under Polish law the bidders had to help Poland pay for the 48-plane order, needed to bring the ex-Communist country up to NATO standards, by a package of investments worth at least the value of the contract.

Half of that investment must go to the defence industry. When he announced the decision on Friday Defence Minister Jerzy Szmajdzinski made no bones about it - the value of Lockheed Martin's investments in Poland had played a key role in netting the deal.

He said the US offer was "the most complete and beneficial for the air force and the Polish economy".

The investment programme could "bring Poland economic development and generate new jobs", he said.

Poland, which is preparing to join the European Union on May 1, 2004, expects to see its gross domestic product increase by a paltry 1.2 percent this year, after a hike of nearly seven percent five years ago.

Unemployment currently affects 17.5 percent of the working population countrywide and 30 percent in certain regions. Lockheed Martin has proposed a total of 104 investment projects in Poland - 55 in the arms industry and the remainder in cars, steel and the oil sector.

This is good news for aviation factories in Rzeszow, southeastern Poland, and Bydgoszcz in the north, the shipyards of Szczecin in the northwest, the oil refinery in the northern city of Gdansk and the GM/Opel car factory in Gliwice in the south.

The WSK aviation factories in Rzeszow are 85-percent controlled by US firm Pratt and Whitney and will have the opportunity to make engines for the F-16.

"The choice of the US plane represents a big opportunity for our factory, as well as for our region," WSK chairman Marek Darecki said.

The region of Rzeszow, where unemployment is high, has been collaborating for several years with Lockheed Martin.

The aviation factories at Bydgoszcz have specialised in the maintenance of the MiG planes the new F-16 fighter jet will replace and technical director Alfred Zaluzny said the contract with Lockheed Martin would give them a "chance of survival".

The company created from the ashes of the Szczecin shipyards that went bankrupt last year can expect a US order of six vessels as a result of the Lockheed Martin deal and the oil refinery in Gdansk, Poland's second largest city, can look forward to a modernisation programme of 540 million dollars, refinery chairman Pawel Olechnowicz said.

The GM/Opel car factory in Gliwice, where medium cylinder Astra cars are currently made, hope Lockheed investment will finance a new model.

Finally, the US aeronautics giant has promised to help Poland sell goods to a value of 700 million dollars to the United States by helping it obtain the necessary licences to sell small Sky Truck and Dromader planes.

With the contract decision made, the next step is hard bargaining to transform the offer into reality.

Deputy Economy Minister Andrzej Szarawarski said Poland should now "negotiate tough" one by one on all the projects which have been proposed.

Polish experts say the 9.8 billion dollars put forward by the United States may be exaggerated and, according to their figures, the benefits will come to just 6.8 billion dollars.

The two sides have until the end of March to sign the sales contract and then another 60 days to agree on all the investment projects, a precondition for signing the final accord.

With acknowledgement to Maja Czarnecka, Sapa-AFP and BC-Poland-Military Warsaw.