Posted on 04/06/2007 5:43:53 AM PDT by sukhoi-30mki
April 5, 2007
Saudis hold back on signing BAE deal until Brown in No 10
David Robertson, Business Correspondent
Saudi Arabia will wait for Gordon Brown to become Prime Minister before signing a £20 billion deal to buy Eurofighter Typhoon jets from BAE Systems, The Times has learnt.
Negotiations for the sale of 72 fighter jets are believed to be progressing well but the Saudis want the deal endorsed by Britain’s next Prime Minister.
The contract between the two governments is expected to be signed in late June or early July once a new leader is chosen by the Labour Party.
Last year the Saudis threatened to scrap the deal if the Serious Fraud Office continued an inquiry into BAE’s sale of Tornado jets in the 1980s. Diplomatic relations between the two countries began to recover only after the Government shut down the SFO investigation on the ground of national security.
With Tony Blair set to leave Downing Street soon, the Saudis want the next Prime Minister, expected to be Mr Brown, to endorse the Eurofighter deal.
This will be taken as a broader reaffirmation of the UK-Saudi relationship after last year’s breakdown in relations.
A source close to the negotiations said: “The most important thing for the Saudis is trust and they felt badly burnt by the SFO inquiry.”
The Eurofighter sale will be called Al-Salam and is one of the largest defence orders won by BAE.
A memorandum of understanding was signed by the UK and Saudi governments last year, but progress on a formal contract was derailed by the SFO inquiry. The SFO was looking into allegations of bribery and corruption in BAE’s dealing with Saudi officials, including members of the royal family. The allegations related to the Al-Yamamah oil-for-arms deal, which began in 1986 and has so far been worth £43 billion to BAE.
Al-Salam will further develop BAE’s role in Saudi Arabia as the company expects to build up to 48 of the aircraft there.
The remaining Typhoons will be built by BAE’s factory in Warton, Lancashire. The cost of the jets is forecast to be approximately £5 billion with a further £5 billion spent on equipment and weaponry. Maintenance and servicing will provide BAE with a long-term stream of income worth a further £10 billion.
The Government has been negotiating the sale of the Typhoons for a number of years with Des Browne, the Defence Secretary, and his predecessors Geoff Hoon and John Reid, visiting Saudi Arabia regularly. Mr Blair is also understood to have visited the kingdom twice to discuss the contract. By comparison, Mr Brown, the front-runner to replace Mr Blair, has had little involvement and, given the political sensitivity of this deal, the Saudis want him to endorse it publicly.
Separately it emerged yesterday that Mike Turner, the chief executive of BAE, earned £2.4 million last year, a 50 per cent increase on 2005.
Are we supposed to take this as a slap that they didn't go to Boeing or McD-D or Lockheed?
Have no fear,Bush is on the case to sell the KSA weaponry worth 5 billion to 10billion USD.
http://www.freerepublic.com/focus/f-news/1812376/posts
The Saudis want a newer Air Superiority fighter, and we're not selling the F-22. Since they already fly the F-15, that leaves either the Su-30 or the Eurofighter.
I think it is a positive sign that the contract didn't go to Russia.
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