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Last Updated: Friday, 1 December 2006, 14:10 GMT
Paris 'threatens' BAE Saudi deal
Image of Eurofighter seen from the front
The Typhoon still faces a fight to hold onto its vital Saudi customer
French and Saudi officials are in talks over the sale of Rafale fighters, planemaker Dassault has admitted.

The links threaten a 6bn deal won by BAE Systems to sell 72 Eurofighter Typhoons to Saudi Arabia.

Speculation has grown that Saudi ire over a Serious Fraud Office (SFO) probe into alleged corruption might cause the huge Typhoon deal to collapse.

"Today there are still discussions over the Rafale," a Dassault spokesman told the BBC News Website.

He characterised the Franco-Saudi talks as "very, very slow" and stressed the official Dassault position that the matter was entirely in the hands of the respective governments.

Difficult phase

Earlier this week BAE Systems chief executive Mike Turner confirmed that negotiations over the Saudi deal had slowed down. But the UK company denied that contract discussions had completely stalled.

While BAE Systems employs 5,000 people directly on the Typhoon, many more work for engineering subcontractors engaged in the project.

BAE Systems strenuously denies allegations that secret slush funds were employed to underpin the Saudi deal.

High-level intervention

French President Jacques Chirac is believed to have lobbied hard for the Rafale when he visited Saudi Arabia in March.

Despite orders from the French Air Force and Navy, the aircraft has yet to clinch a single export deal and the French aviation industry is desperate to capture its first overseas Rafale customer.

Rafale jet
The Rafale is locked in an export deal dogfight with the Typhoon

Saudi plans to buy 72 Typhoons from BAE Systems form the latest instalment in a defence relationship that dates back to the 1960s, when the UK first equipped the Saudis with jets.

This relationship matured into the Al Yamamah deal during the 1980s, when the UK supplied Tornado and Hawk jets with associated defence infrastructure.

This meant huge construction contracts for UK businesses. In turn, this support and engineering bond helped to secure the order for Typhoons.

The long history of Anglo-Saudi technical cooperation could make switching suppliers tricky, but the French are likely nonetheless to keep pushing for the lucrative deal.

The Eurofighter consortium is comprised of four European nations, the UK, Germany, Italy and Spain. Each nation assembles components from other partners at its own site.

France declined to participate in the joint European project when it was first mooted during the 1980s, and insisted on going it alone in order to retain full control over its indigenous fighter programme.




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