Saudi Arabia to Buy Fighter Jets from BAE Systems


Saudi Arabia said on Monday it had signed an agreement with the British government to buy 72 Eurofighter Typhoon jets from BAE Systems for 4.43 billion pounds ($8.84 billion).

"A contract was signed between the two governments to buy the plane on Tuesday, Shaaban 29 (September 11) at a cost of 4,430 million pounds sterling," a statement on official news agency SPA said, attributed to a Defence Ministry official.

A deal including the jets as well as weapons and long-term maintenance of the aircraft is expected to raise its value to 20 billion pounds, analysts say.

Saudi Arabia will pay the same price per jet as those sold to Britain, the statement said.

It cited a preliminary agreement in December 2005 in which Britain pledged to transfer technology and investment to the Saudi defence industry, as well as to train Saudi pilots. It gave no more details.

A spokeswoman for the UK's Ministry of Defence declined to confirm the report, reiterating the ministry's position that negotiations were continuing and were expected to conclude by the end of the year.

Controversial Deal

The deal became the focus of a political storm last year when the British government halted a probe of BAE by the country's Serious Fraud Office (SFO) after Saudi Arabia warned  it might cancel the order if the investigation went ahead.

The probe concerned allegations of corruption in a previous arms deal between Britain and Saudi Arabia involving BAE.

Past arms deals with Saudi Arabia are the biggest export pacts in UK history, worth an estimated 43 billion pounds.

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

British media reports have accused BAE of paying 1 billion pounds over a decade to Saudi Prince Bandar bin Sultan, son of Defence Minister and Crown Prince Sultan, in connection with a previous fighter plane deal.

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

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

Eurofighter jets are built in Britain, Germany, Italy and Spain by a consortium involving BAE, EADS and Finmeccanica.

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