Fighter jet mega deal to feature in Chirac visit

03 March 2006

Two multi-billion-dollar defence deals are expected to feature prominently in talks between Paris and Riyadh during a visit to the kingdom by France's President Chirac in early March. Sources in Riyadh say that discussions are expected to cover a possible memorandum of understanding (MoU) between the two countries for the supply of Rafale fighter jets manufactured by France's Dassault Aviation. An estimated $9,000 million border security deal with an all-French consortium led by Thales Group is also expected to be on the agenda. A spokesman for Dassault confirmed that its chairman and chief executive officer Charles Edelstenne would form part of the delegation, which arrives in Riyadh on 4 March. However, he said that although Dassault had been involved in 'informal discussions' with Riyadh for several years, there had been no formal negotiations so far.

'We don't know what will be covered during the visit,' said the spokesman. 'There is an MoU between London and Riyadh for the supply of Typhoon jets but that is not a contract and we do not know exactly what it covers. We do not know the needs of Riyadh and there has been no request for proposals issued.'

The sources in Riyadh said that the contract could be similar in scale to the estimated $10,000 million deal covered by the MoU signed between London and Riyadh in December. The agreement with London is thought to cover the supply of 72 Typhoon jets, manufactured by the Eurofighter consortium (MEED 23:12:05). In April 2005, Dassault denied reports in the French press that a $7,850 million deal had been agreed during the visit of then-Crown Prince Abdullah to Paris. Under the reported deal, the kingdom would buy 48 Rafale combat aircraft from Dassault, with the option to purchase another 48 of the jets at a later stage. Other French companies reported to be involved in the deal include Thales, Safran and MBDA (MEED 22:4:05).

President Chirac's discussions are also expected to cover an estimated $9,000 million internal security contract aimed at increasing border security in the kingdom, particularly along its porous southern border with Yemen, which is seen as a route into the kingdom by terrorists and smugglers. The Thales consortium has been involved in long-running discussions with Riyadh about the contract. Chirac's visit is also expected to cover the signing of a joint venture agreement between France's Total and Saudi Aramco for the development of an estimated $5,000 million grassroots export refinery at Jubail 2 industrial city in the Eastern Province (MEED 17:2:06).

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