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Saudis, UK ink fighter jet deal

A Eurofighter Typhoon aircraft flies past RAF Coningsby in Lincolnshire, England, during a media preview in July. PHOTO: AP

Saudi Arabia has signed a ٢.43 billion (US$8.84 billion) agreement with Britain to buy 72 Eurofighter Typhoon jets from BAE Systems PLC despite a controversy that had threatened to scupper the pact.

The announcement by the Saudi Press Agency on Monday quoted an unnamed Saudi Defense Ministry official and said the deal was signed on Sept. 11, more than year after the sale was first agreed to in principle.

Britain's Ministry of Defence confirmed the deal, saying in a statement that it was part of a new defense cooperation program between the two countries called Project Salam, the word for peace in Arabic. The agreement also includes opportunities to train Saudi pilots and ground technicians in the UK, the statement said.

The deal including weapons could be worth up to 㿀 billion to prime contractor BAE Systems and firms spread across Europe as well as in Saudi Arabia, analysts say.

The Saudi statement said the Kingdom would pay a price similar to that paid by Britain for the jets.

Analysts expect the UK to sell 24 Eurofighters it has on order under the program's second tranche of deliveries and to set up an assembly line in the Kingdom to build the remaining 48.

Details are expected when Saudi King Abdullah pays a state visit to Britain at the end of next month.

Saudi Arabia and Britain have signed arms deals since the 1960s, including the al Yamamah arms-for-oil pacts first signed in the 1980s which have produced an estimated 㿗 billion in business.

Sources familiar with the negotiations said that this pact will break from that formula, using cash from the Saudi defense budget instead of the oil shipments used previously.

"It'll be cash," said one source on condition of anonymity.

Critics of past deals, which sparked investigations by anti-corruption authorities in the UK and the US, said the use of the oil had made it easier to conceal secret payments.

The latest Eurofighter deal took shape with a preliminary agreement in December 2005 but stalled as a probe by the UK's Serious Fraud Office (SFO) into BAE's past Saudi deals angered the Saudi Arabian government.

Last December, former British prime minister Tony Blair stepped in to halt the SFO probe citing the risks it posed to the UK-Saudi relationship in a controversial move which drew sharp criticism in the media and from his political opponent.

British media reports have accused BAE of paying ٟ billion to Saudi Prince Bandar bin Sultan, son of Defense Minister and Crown Prince Sultan, in connection with a previous fighter plane deal.

Bandar, a former Saudi ambassador to the US, has denied the sums involved represented secret commissions to him.

BAE has denied making any wrongful payments in its dealings with Saudi Arabia.

In June, the US Department of Justice also launched an investigation into BAE over its compliance with anti-bribery laws, including its past dealings with Saudi Arabia.
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