Saudi Typhoon on the skids?

[Jackonicko]

AFX News Limited
BAE Systems confirms lack of progress in Eurofighter talks with Saudi
11.28.2006, 05:13 AM

LONDON (AFX) - BAE Systems PLC has confirmed reports claiming that talks between the UK and Saudi Arabia about a 10 bln stg order for new Eurofighter jets have faltered.

The Financial Times reported that Saudi Arabia has suspended negotiations with Britain over its purchase of 72 Eurofighters from BAE because of a row over an investigation into an alleged 60 mln stg slush fund.

'We cannot speak on behalf of the two governments. But I do know we are not currently moving forward on finalising the Typhoon contract,' the newspaper quoted Mike Turner, chief executive of BAE Systems, as saying.

A BAE spokesman confirmed Turner's comments, saying the negotiations between the two governments had 'not been moving at pace' since the end of the festival of Ramadan earlier this month.

However, he added, 'It's a contract that's being negotiated between the two governments and we can't comment on it.'

A report in Tuesday's edition of British newspaper The Independent quoted sources close to the negotiations as saying Saudi Arabia could abandon its talks with BAE and decide instead to order between 24 and 36 Rafale jets from French rival Dassault Aviation in the next few days.

'The Saudis are serious about switching to the French and it could happen in the next 24 to 48 hours,' the newspaper cited a UK defence source as saying.

A Dassault spokesman said the French government had been talking to the Saudis for some time about selling them the Rafale, but added, 'These are discussions between the French state and Saudi Arabia and we're not commenting on them.'

The Eurofighter deal is initially for 10 bln stg, but the value of the agreement could rise to as much as 40 bln for BAE through maintenance and upgrades.

The row has flared over a three-year investigation by Britain's Serious Fraud Office (SFO) into claims that BAE established a 60-mln stg slush fund for some members of the Saudi royal family that allegedly provided perks including luxury cars to ensure that they kept doing business with BAE.

BAE Systems has sealed a series of lucrative deals with Saudi Arabia since 1985.

Saudi Arabia threatened to suspend diplomatic links with Britain over the affair after SFO lawyers persuaded a Swiss magistrate to force disclosure of details about confidential Swiss bank accounts, this week's Sunday Times reported.

'We have done nothing wrong ... We don't want to interfere with the judicial process, and politicians clearly cannot do that, but we do want to see a resolution of the SFO investigation,' Turner said.

'It is damaging for our business.'

A spokesman for the British Ministry of Defence declined to confirm or deny the reports when contacted by Agence France-Presse. The SFO, speaking to the FT, also declined to comment, beyond saying that its investigation was ongoing.

A source close to the Saudi government told the FT that there was 'a lot of meat in the story' that the Middle Eastern kingdom was considering commercial action.

An unnamed French official, however, downplayed the possibility of Saudi Arabia signing a deal with France, saying, 'It would be quite a decision to switch like that ... We do not really know which way the wind will go.'

[email protected]

[The Helpful Stacker]

Well the Saudis can stamp their feet, sulk a bit and have a second-rate French aircraft or just ride out the storm and have something decent.

I suppose one thing this does show is that the government doesn't have their fingers in all the pies. If BAe lose the contract the government could lose a lot of unemployed voters, something I've no doubt the government are well aware of and would be trying the 'fix' if they could.

[GOLF_BRAVO_ZULU]

Are you lads keeping tally on; http://www.pprune.org/forums/showthread.php?t=248658&page=2 ?

[jindabyne]

C'mon Jacko - do keep up!

Regards - J

[Lyneham Lad]

Iran threat pushes Saudis towards Rafale jet deal (http://www.thebusinessonline.com/Document.aspx?id={C25DF273-1182-4909-8741-743D738ED879})

So, the Saudis are getting mighty twitchy about their Iranian neighbours and the potential wider Sunni -v- Shia power struggle. Interestingly, their is another article in 'The Business' entitled:-
Revealed: the Saudi-Pakistan plan to counter Iran's nuclear ambitions (http://www.thebusinessonline.com/Document.aspx?id={5634FF4B-442B-4F42-81F1-9B67C4B1F24D})


Eek :eek:

[Kitbag]

Frankly, recalling the pain that was the first Tornado deal which resulted in appalling spares shortages etc, I think its probably a damn good thing. Why shouldn't the House of Saud equip themselves with second rate equipment? one day, perhaps, we will be glad that they have.

[jindabyne]

Holdall

What an incredibly well-informed post. Your power of re-call is weak. Can't be ars*d to go through it all again - PM me if you wish to get the facts.

[Kitbag]

Jindivik

I think my recall is rather better than yours in this case, I can find no factual evidence that you have been through this within the Pprune forum. Perhaps you are overly sensitive to your employers current vulnerabilities?

[Jackonicko]

Kitbag,

There were short term Tornado spares shortages as a direct result of the AY Tornado contracts, but at the same time, the injection of capital and commercial pressure allowed a number of lingering difficulties to be addressed that would otherwise have dragged on for years.

The big difference is that Saudi Tornados slowed deliveries when they were needed whereas Saudi Typhoon deliveries promise to delay Typhoons at exactly the time that it is most useful for them to be delayed, and will result in relatively austere Block 8 RAF aircraft (which have the Tranche 2 processors, but hosting Tranche 1 software) being replaced by more useful Block 10s or Block 15s at the back end of Tranche 2.

Industry is already producing Typhoons at a rate which is too fast for the customers to absorb.

[Kitbag]

JN, many thanks for a sensible reply :ok:

[Jackonicko]

No problem. Thank you.

I'm told that the AY £ helped the F3 radar issue to be fixed far, far more quickly than might otherwise have been the case.

[jindabyne]

Kitbag

I apologise for the rudeness and tone in my post of the 9th - please note the time, and the fact that I had just returned from a well-known re-union in London! I completely mis-read your message and, given my desk-appointments in the mid-80s, probably bridled at your 'appalling spares shortages etc' comment.

Jacko has since (IMHO) put things in the historically correct perspective.

Sorry!

[Kitbag]

Jindabyne, of course I accept your apology, thank you, you stopped it turning into a slanging match.
It would certainly be an own goal if the Saudi contract falls through.
I have little knowledge of the capability of the aircraft other than what is in the public domain. It seems its French rival has also gone through a protracted development phase but the Typhoon project seems fated to attract bad press e.g. cost overruns, guns, the CGY nose wheel problem etc.
Perhaps for now the emphasis for the aircraft should be placed on developing, qualifying and utilising its air-ground capability even at the cost of A-A so that within the current climate it can be SEEN to be money well spent (not to mention giving Harrier a much needed breathing space). Perhaps not quite so sexy, but surely more pragmatic else Joe Public will really start to wonder about all the money our generous government is pouring into our Services (who are really not overstretched because the Stats Office can show you all is well with a nicely coloured graph).
Backing off now.

[ORAC]

DID: (http://www.defenseindustrydaily.com/2006/12/rumors-of-rafale-more-2006-saudi-shopping-spree/index.php) Rumors of Rafale....

Business online (http://www.thebusinessonline.com/Document.aspx?id=C25DF273-1182-4909-8741-743D738ED879) reports that the Saudi government is in talks to buy 36 Rafale fighter jets from the French regardless of how ongoing issues with the Eurofighter Typhoon contract are resolved. The Dassault Rafale contract would be in addition to the Eurofighter, not an either-or deal. With support and complementary ordnance added in, this could easily be a $5-15 billion transaction of its own.

Despite earlier reports of a British offer to delay some of its own procurement in order to get 24 Eurofighters to the Saudis quickly, The Business reports that a key consideration driving the negotiations is France's ability to deliver the Rafale quicker than the Eurofighters can be manufactured. A senior Saudi source reportedly said:

"Two things have changed in the five years since negotiations began with the British over Eurofighter. The Saudis now have more cash because of money from oil and the situation [with Iran] means it has a pressing need to bolster its airforce...."

[Lyneham Lad]

Orac, old chap, do try to keep up.............:)
See my post of the 7th for a timely link to the article on the Saudi Typhoon -v- Rafale question.
More importanly from my perspective is the other article in Business to which I provided a link. This concerns Saudi funding of the Pakistani nuclear bomb programme. Perhaps Ppruners were too busy to read it :( or maybe I should have started a new thread to give it more prominence. On the other hand, the potential for a nuclear conflict in the Middle East may not be a subject worthy of this forum :}
By the way, I see that Israeli PM Mr Olmert has confirmed, for the first time that Israel has nuclear weapons (previous Israeli policy has always been to give ambiguous answers to the question). Perhaps Mr Olmert was stung into action by the statement from Iranian President Mahmoud Ahmadinejad "Thanks to people's wishes and God's will, the trend for the existence of the Zionist regime is downwards. This is what God has promised and what all nations want. Just as the Soviet Union was wiped out and today does not exist, so will the Zionist regime soon be wiped out."

Even if his statement is judged not be a threat of armed conflict, it is still one country threatening/predicting regime change in another............maybe Ahmadinejad is a follower of Dubya after all :E

[Zoom]

Wow!! Congrats to Jindy and Kit for resolving their apparent differences in such a gentlemanly fashion. More of this sort of behaviour would make PPRuNe a far nicer place to be. :D :D :D

[Kitbag]

In all honesty the plaudits should go to Jindabyne.

Kb :D

[G-CPTN]

SFO has reported it will NOT be proceeding with their enquiries over the Saudi arms deal(s).

Too late?

[DEL Mode]

Do you have a reference to your report?

[G-CPTN]

BBC Radio Five Live 17.30pm (and now 17.39)
http://www.sfo.gov.uk/ - expect announcement later.

Attorney General - reason "National Security . . . . "

http://news.bbc.co.uk/1/hi/business/6180945.stm
The Serious Fraud Office has ended its corruption inquiry into a £6bn fighter planes deal with Saudi Arabia.
Attorney General Lord Goldsmith said the SFO was "discontinuing" its investigation into Britain's biggest defence company, BAE Systems.
The probe had related to the Al Yamamah arms deal with Saudi Arabia. BAE has denied any wrongdoing.
Lord Goldsmith told the Lords he thought that a prosecution "could not be brought".
He said the decision had been made in the wider public interest, which had to be balanced against the rule of law.
Lord Goldsmith also told peers that Prime Minister Tony Blair had agreed that the continuation of the investigation would cause "serious damage" to relations between the UK and Saudi Arabia.
It emerged earlier this month that French and Saudi officials were in talks over a possible alternative deal, which could scupper the BAE sale.

[DEL Mode]

Thanks very much - On BBC News Web Site too (added to get over 10 characters)

[G-CPTN]

Lord Goldsmith said that both Mr Blair and Defence Secretary Des Browne had argued that carrying on the investigation would harm intelligence and diplomatic co-operation with Saudi Arabia, in turn damaging the UK's national security.
BBC business editor Robert Peston says that major UK companies - both arms firms and other manufacturers - have voiced fears that they stood to lose other lucrative deals should the probe have continued.
The SFO said in a statement, however: "No weight has been given to commercial interests or to the national economic interest."
The Director of the Serious Fraud Office has decided to discontinue the investigation into the affairs of BAE SYSTEMS Plc as far as they relate to the Al Yamamah defence contract with the government of Saudi Arabia.