BAE to Seal $40B Eurofighter Deal With Saudis

[chunga1]

not good news for the americans

Report: BAE to Seal $40B Eurofighter Deal With Saudis Next Week

AGENCE FRANCE-PRESSE, LONDON


British defense firm BAE Systems will next week clinch a 20-billion-pound ($40.4 billion) deal to supply 72 Eurofighter Typhoon jets to Saudi Arabia, a report said Sept. 7.
"It is understood that the British government sent the Typhoon contract to King Abdullah two days ago," The Times newspaper in London wrote. "The king is expected to sign the contract next week, sealing one of the largest export orders ever won by the UK.”
A spokeswoman for BAE told the newspaper, "This is a government-to-government negotiation and we are unable to make any comment on it."
The Ministry of Defence said negotiations were continuing, according to The Times.
It had been feared that the deal would be scuppered because of a British investigation into allegations that Saudi Arabia took bribes from BAE under a military plane deal struck between Britain and the Middle Eastern kingdom more than 20 years ago.
Britain’s Serious Fraud Office last year investigated BAE Systems’ 43-billion-pound Al-Yamamah deal in 1985, which provided Hawk and Tornado jets plus other military equipment to Saudi Arabia.
But the investigation was shelved by the British government last December in a move supported by then-Prime Minister Tony Blair amid concerns over Britain’s national interests.
Despite this, the U.S. Department of Justice in June launched its own investigation into BAE Systems amid allegations the British arms maker paid bribes to secure contracts in Saudi Arabia in the 1980s.
BAE Systems is alleged to have set up a 60-million-pound "slush fund" for members of the Saudi royal family to secure business, and made illegal payments to those involved in its deals. BAE strenuously denies the charges.

 

[kato]

For those wondering about the price:

The 20 billion pounds include maintenance and upgrade contracts over the next 25 years.

The jets themselves are being bought for 10 billion pounds, as agreed upon in 2006.

 

[swerve]

For those wondering about the price:

The 20 billion pounds include maintenance and upgrade contracts over the next 25 years.

The jets themselves are being bought for 10 billion pounds, as agreed upon in 2006.

I'm rather skeptical that even the Saudis would pay £10 billion pounds just for 72 Typhoons. While the rumoured price may be correct (but we don't know that), I'm sure it would include a lot more than just the aircraft. Previous aircraft sales to Saudi Arabia have all been packaged with weapons, training, spares, etc.

 

[kato]

I'm rather skeptical that even the Saudis would pay £10 billion pounds just for 72 Typhoons. While the rumoured price may be correct (but we don't know that), I'm sure it would include a lot more than just the aircraft. Previous aircraft sales to Saudi Arabia have all been packaged with weapons, training, spares, etc.

Over the last two years, the stated contract price (for the aircraft only) has gone up and down again and again, between 6 billion and 10 billion (in late 2005, for 6 billion, the number of aircraft was kept confidential though).

The latest figures i've seen went with a around 10 billion contract for aircraft + training + initial parts package, with a "potential for an overall 20 billion" if BAE scored the maintenance/upgrade contract for the entire 25-year lifetime (which they apparently did).

 

[SaudiArabian]

the Saudi government issued a statement before saying that the price which will be paid is the same price been paid by RAF for their Typhoons

and i heard the price 6.8-6.9 Billion $ as a price for the 72 jets,

the rest are for maintenance , transfer of technology , armament and domestic weapons production

just know the price of one Typhoon and multiply it in 72

 

[Ryttare]

The numbers I've seen in Swedish press is 5 bn pound for the planes, another 5 bn for weapons and the rest for maintenance.

 

[tphuang]

the Saudi government issued a statement before saying that the price which will be paid is the same price been paid by RAF for their Typhoons

and i heard the price 6.8-6.9 Billion $ as a price for the 72 jets,

the rest are for maintenance , transfer of technology , armament and domestic weapons production

just know the price of one Typhoon and multiply it in 72

yeah, but do you really believe that? You are basically paying $550 million per typhoon over its lifetime. Ouch.

 

[SaudiArabian]

yeah, but do you really believe that? You are basically paying $550 million per typhoon over its lifetime. Ouch.

Al Salam deal (<< it won't be called Al Yamamah 3 afterall) will include training of over 10000 Saudi personnel plus a domestic center to develop weapons. also not to forget to mention the transfer of technology , the spareparts , the weaponary , the logistics...

all these together will cost big prices but it will massively enhance the RSAF capability over any competitor neighbors including the Israeli air force

i noticed in local newspapers from time to time that BAE company puts lots of jobs oppurtunities specified for Saudis only.

also not to forget , the payments differ .. i mean the Kingdom isn't paying the 40 Billion $ in few hours with a cheque. it will be schedules paiments for the next two decades or more.

 

[swerve]

Over the last two years, the stated contract price (for the aircraft only) has gone up and down again and again, between 6 billion and 10 billion (in late 2005, for 6 billion, the number of aircraft was kept confidential though).

The latest figures i've seen went with a around 10 billion contract for aircraft + training + initial parts package, with a "potential for an overall 20 billion" if BAE scored the maintenance/upgrade contract for the entire 25-year lifetime (which they apparently did).

But stated by who? All the numbers I've seen have been press speculation. Not one has had a whiff of having come from an official source, even off the record.

 

[Alpha Epsilon]

Assuming this deal will go through at 20 billion pounds I think the price is not too high, just consider what will probably be part of it.

- 72 Typhoons
- Tornado upgrade
- missiles (probably ASRAAM, Storm Shadow, Paveway and Brimstone)
- a Typhoon final assembly factory in Saudi-Arabia
- Some Technology Transfer
- Maintenance for the life of the Typhoons
- Training of RSAF personnel in the UK

Things such as new Hawks will probably be a seperate contract.

 

[Waylander]

Is Storm Shadow fixed as the stand off weapon of choice or is Taurus also in the race?
Ok, BAE is doing the contract for this part of the world but maybe...

 

[Khairul Alam]

the initial plan included assembly of some of the jets locally in SA. is that plan still on??

 

[Scorpius]

seems to be.sounds like a really good deal to me for KSA,no downgraded hardware like in the case of F-15s(Desert eagle version).
If KSA have this fighter aircraft they will be having F-15Cs,F-15Ss,Panavia Tornadoes and EF Typhoons.The F-15S will still have the air superiority role,right?

 

[Alpha Epsilon]

Is Storm Shadow fixed as the stand off weapon of choice or is Taurus also in the race?
Ok, BAE is doing the contract for this part of the world but maybe...

Yes, at least that is what I have read.

 

[swerve]

Is Storm Shadow fixed as the stand off weapon of choice or is Taurus also in the race?
Ok, BAE is doing the contract for this part of the world but maybe...

Saudi Tornados have been seen & photographed flying around in the UK with Storm Shadow. Would seem sensible to procure the same type of missile for both Tornado & Typhoon.

 

[chunga1]

is this an announced deal yet?

 

[Waylander]

Thanks for the answers.

 

[Alpha Epsilon]

It might have been already signed, the Saudi Crown Prince was set to present the deal for signature by the Saudi King today.

 

[riksavage]

According to the UK Times, the MOD is looking at a renegotiating, curtailing or even cancelling the RAF’s Tranche 3 Typhoon order in favour of diverting the funds to the F35B programme for the new carriers.

http://business.timesonline.co.uk/tol/business/industry_sectors/engineering/article2441602.ece

The Tranche 3 order would then be funnelled to Saudi Arabia.

Makes sense to me, we ordered too many Typhoons in the first place and we need the much anticipated F35B’s for maritime strike. Any additional savings can be utilised to buy much needed medium-helicopter lift to support UK land forces.

 

[Grand Danois]

Give the Treasury this answer

However, Mr Zoller insisted that the Tranche 3 contract was firm and that this was not an option.

“The Saudi order will be on top, not instead of Tranche 3,” he said.

and let them negotiate and find the cost savings. The contract was designed with exactly this situation in mind. Good luck getting all four partners agree to this.

Anyhow, the ordered numbers of Typhoons fits the bill. Not too many. Treasury is just cutting money where there isn't any to cut, so it seems the JSF will have to take the blow.