Britain secures £10bn contract from Saudis for Eurofighter
Britain's aerospace industry received a massive boost yesterday after the Government announced a deal worth an estimated £10bn to supply Eurofighter Typhoon fighter aircraft to Saudi Arabia.
The biggest beneficiary of the huge arms deal will be BAE Systems, which has a 37 per cent stake in the pan-European consortium that makes the Eurofighter. Other companies who will gain include Rolls-Royce, part of the Eurojet consortium which makes the plane's engines, Smiths Group and Dowty. BAE shares rose 6 per cent to 370p.
The Saudi deal will help safeguard tens of thousands of jobs in the UK defence industry but it is also likely to heighten tension in the Middle East, where the Kingdom's neighbours are fearful of its military prowess.
The Saudis are understood to have ordered a total of 72 Eurofighters to replace older aircraft, including Tornado jets bought in the 1980s and 1990s from BAE under the Al Yamamah arms-for-oil deal.
The Eurofighter order in effect amounts to the third phase of the Al Yamamah programme, and marks the first time the aircraft has been bought by any country outside Europe. The air forces of Britain, Germany, Italy and Spain are buying a total of 620 Eurofighters, with the RAF requirement standing at 232 aircraft alone. In addition to the aircraft, worth about £4bn, the deal includes a full package of training, through life support, spares and technology transfer, which will at least double the value of the deal and perhaps increase its value by 150 per cent.
As with earlier phases of the Al Yamamah deal, the Saudis will pay in oil. This is then traded on the international markets and the proceeds remitted to the Ministry of Defence, which in turn pays BAE and the other UK contractors.
The MoD said the details of the latest agreement with the Saudis were confidential, saying it was "intended to establish a greater partnership in modernising the Saudi Arabian armed forces and developing close service-to-service contacts, especially through joint training and exercises".
The statement also said the partnership recognised the key objectives the UK and Saudi governments shared with regard to combatting terrorism and highlighted the "wise leadership role" played by the Saudis in promoting regional stability.
Britain has supplied 120 Tornado jets to the Saudis along with Hawk and PC-9 trainer jets. The programme has been worth an estimated £20bn since it began in 1985.
The Saudi air force has 106 Tornados in service along with just over 160 American F-15 fighters and 93 F5-E aircraft.
Is your name now 'banned' in Saudi Arabia?
Oscar Pistorius trial: Photographs of Paralympian splattered in blood shown in court
Seth Rogen compiles list of all the celebrities he’s got high with
Missing Malaysia Airlines Flight MH370: Satellite ‘pings sent five hours after contact was lost' the only clue in hunt for £160m plane
Missing Malaysia Airlines Flight MH370: New radar evidence suggests missing plane may have been hijacked
Katie Hopkins continues campaign to become Britain's most hated talking head with poorly timed Bob Crow tweet
No EU referendum under Labour: Ed Miliband to reveal that vote on membership is ‘unlikely’ in next Parliament if party wins power
Grace Dent: Who cares if she spells it Barraco Barner? Gemma Worrall is more employable than some bookish arts graduate
Europeans have ‘got whiter’ due to natural selection in past 5,000 years, scientists say
Fracking is turning the US into a bigger oil producer than Saudi Arabia
The rise of Ukip: Study warns Labour that Eurosceptic party's electoral base now 'more working class than any of the main parties'
- 1 Is your name now 'banned' in Saudi Arabia?
- 2 Best films on Netflix: 32 movies that will put an end to your scrolling
- 3 Saving a crushed egg with tape and glue: Why you should care about the kakapo
- 4 Istanbul protesters take 'Ellen selfie' from the back of a police van
- 5 Lady Gaga has struggled with eating disorders in the past, so it's indefensible that she's glamourising bulimia in her SXSW set
iJobs Money & Business
£35000 - £43000 per annum + Bonus and Benefits: Harrington Starr: A global lea...
£50000 - £60000 per annum: Harrington Starr: Linux Systems Administrator - UNI...
£32000 - £36000 per annum + generous benefits: Pro-Recruitment Group: * TAX * ...
£37000 - £40000 per annum + £20000 benefits package: Pro-Recruitment Group: **...