But Mike Turner, the plain-speaking chief executive of BAE Systems, Britain’s biggest defence group, let the cat out of the bag at a dinner on the eve of last year’s Paris Air Show. “The objective is to get Typhoon in Saudi Arabia. We have £43 billion from Al-Yamamah over the past 20 years and there could be £40 billion more,” said Turner.
He saw part of his wish come true last week. After months of negotiations and weeks of recent speculation over the status of the deal, the government confirmed that Des Browne, secretary of state for defence, had signed a preliminary agreement on the Typhoon — the service name of the combat aircraft more commonly called Eurofighter.
The Saudis will take 72 of the aircraft and, as with previous such deals, including the famous Al-Yamamah agreement struck by Margaret Thatcher in the 1980s, the contract will be between the two governments rather than direct with BAE.
But it is BAE that will be the biggest beneficiary. Although Eurofighter is a four-nation programme between Britain, Germany, Spain and Italy, BAE will take the lead. The first 24 planes for the Saudis will be those at present allotted to the Royal Air Force, with the RAF postponing its deliveries until later in the production run.
It is not known how the remaining 48 will be built. Defence analysts say the Saudi government is intent on building an aircraft plant in Al-Khobar in the kingdom’s eastern province, where the Eurofighters could be assembled from kits provided by BAE. The British company is also expected to commit itself to training Saudi nationals to complete the work.
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The sale and support deal could eventually provide a sizeable chunk of BAE’s turnover. Some analysts say the order itself will be worth about £5.5 billion, with support worth another £25 billion up to 2030.
More deals are likely to follow. BAE executives are hoping to land an order for Hawk jet training aircraft from the Saudis, and are also in the frame for a huge border-security contract that could be worth up to £4 billion. The deal had been the subject of exclusive negotiations between the Saudi and French governments, but was thrown open to international negotiations in May.
The Middle East, which is awash with petrodollars thanks to the surge in world oil prices, has proved a happy hunting ground for western defence groups in recent months. According to the Middle East Economic Digest, American firms have won defence contracts worth £5.8 billion since July. The largest single contract in that period, which went to a consortium including General Dynamics and Raytheon, was a £3 billion deal to upgrade the capabilities of the Saudi National Guard.
The contract for Britain will reawaken some of the controversies surrounding the original Al-Yamamah deal, which is still under investigation by the Serious Fraud Office. There have so far been five arrests.