BAE in line for new Saudi fighter deal

Saudi Arabia is considering placing a blockbuster order for a further 72 Typhoon fighter jets, worth about £5billion, which could provide a huge boost to defence giant BAE Systems. The oil-rich kingdom signed an original deal for 72 of the jets in 2006. These are in the process of being handed over to Saudi, with the first two Eurofighter Typhoons delivered just last week. An industry source said: 'The Saudis are interested in taking more Typhoons, probably about the same amount again, as long as this (current order) all goes well.' The Typhoon is built by the Eurofighter consortium comprising BAE, which has 33 per cent of the work, Airbus-owner EADS, which has a 46 per cent share, and Italian defence group Finmeccanica with 21 per cent.Saudi's interest in placing a follow-on order would be significant for the British government, which controversially put the country's commercial and diplomatic relationship with Saudi ahead of a fraud investigation into claims BAE bribed officials from the desert kingdom to win arms deals. Investigators at the Serious Fraud Office eventually dropped the probe in December 2006 after former prime minister Tony Blair warned that the Saudis would stop sharing intelligence with Britain in the 'war on terror'. They also threatened to scrap the Typhoon order if the SFO persisted. The fraud squad ditched the probe, saying it could threaten national security if it pressed ahead with the investigation. Saudi Arabia is BAE's third biggest market, after the US and Britain. Despite the expected spending cuts in Britain, it sees Saudi and the US as strong growth marketsfor its weapons. An MoD spokesman said: ' We have no knowledge of any further aircraft requirements from the Saudis.' BAE (up 81/2p at 336p) declined to comment. Eurofighter chief Enzo Casolini yesterday said the consortium hopes to sign a deal on the next wave of orders for its combat jets within days. Britain last month reluctantly recommitted itself to a previously agreed £8bn order, despite concerns over costs. But a deal has yet to be signed. He added: 'We are still negotiating some detail in the contract. I presume that it's just a question of a short time to finalise it. I hope, days.' Casolini also said he is focusing on inking in contracts to export to key markets such as Turkey and Romania. He noted Turkey has a strategic need for 48 combat jets that it is looking to buy, but any agreement is still some years away.

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