Riyadh to tender for border defence

12 May 2006

International defence contractors are on high alert after Riyadh announced in early May that it was set to issue a tender for an estimated $8,800 million contract to design, build and operate a radar-based border security system.

Defence giants including the UK's BAE Systems, the European Aeronautic Defence & Space Company (EADS), Italy's Finmeccanica, France's Thales and the US' Raytheon Corporation are all understood to be interested in the deal after Riyadh ended talks with Thales after 12 years of exclusive negotiations.

The Ministry of the Interior, Kingdom of Saudi Arabia (Miksa) contract covers the supply, installation, operation and maintenance of a state-of-the-art radar system for detecting both land and sea incursions along the kingdom's 6,500-kilometre border. The contract is expected to run for 12 years and involves the construction of 225 radar installations, as well as the supply of telecommunications equipment and aircraft.

Sources at EADS on 5 May confirmed that it would bid for the contract while BAE, Raytheon, Finmeccanica and Thales all say they are following the situation closely.

'We are looking at it,' says a BAE source. 'We are aware of a number of requirements in that area and we are considering bidding for some of them.'

BAE is awaiting the conclusion of negotiations between Riyadh and London for an estimated $40,000 million defence deal covering the supply and maintenance of 72 Typhoon fighter jets, manufactured by the Eurofighter consortium. The deal is expected to be signed in June (MEED 31:3:06).

The news that the Miksa contract was to be openly tendered caught analysts by surprise. In March 2004, Riyadh was reported to be close to awarding the contract to France.

In late March, sources in Riyadh said that a deal with Paris was still under consideration and featured in talks between French President Chirac and King Abdullah in the kingdom earlier that month (MEED 24:3:06).

Local construction companies will submit bids on 13 May for a Defence & Aviation Ministry contract to build a security fence along the entire length of the kingdom's 900-kilometre border with Iraq (MEED 31:3:06).

www.meed.com/defence

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