David Cameron's Arab courtship fails to sell multi-billion pound Typhoon order
David Cameron's efforts to sell a multi-billion pound contract for the United Arab Emirates to buy British-built fighter jets failed last night as the Gulf state pulled out of talks
The failure will be a bitter blow to thousands of workers at BAE Systems' plants near Preston, which were to build the front fusilage and other systems within the 60 Eurofighter Typhoon jets.
Mr Cameron had pressed the case for the deal at the Dubai Air Show just weeks ago in the hope that the Gulf State would pick Eurofighter to replace its old fleet of Mirage jets rather than France's Dassault Systems Rafale aircraft. However, there was no formal competitive bidding process and it is not clear whether UAE will now go with the French.
"The UAE have advised that they have elected not to proceed with these proposals at this time," a spokesperson for BAE said last night.
The UAE's decision is a major blow for both the company and the Prime Minister, who regularly cites Britain's excellence in defence industries when talking positively about the economy. Negotiations have been going on with the UAE for most of this year.
A spokesman for Number 10 Downing Street said: "This was a commercial decision. It was always going to be a difficult deal to do."
BAE and No 10 pointed out that the contract had not been built into its business plan, so it would not lead to any significant drop in profit forecasts. However, another massive Typhoon deal – a £5bn project to sell 72 aircraft to Saudi Arabia – will.
The Saudi agreement, which has seen 34 aircraft delivered so far, had built into it a deal in which Britain and Saudi would, mid-contract, agree by how much each plane would increase in price. This was because of the vast scale of work involved, which would take years to carry out from the date at which the price was first agreed, in 2005.
However, those negotiations, which were hoped to have been completed by the end of this year, have still not reached a conclusion, meaning it is still only getting paid the 2005 price for the jets.
The company said in October that a failure to reach an agreement before the new year would hit 2013 profits to the tune of 6p to 7p a share this year. Previous forecasts had been for 43p a share.
Had Eurofighter won the UAE contract, its partners in Spain and Italy would have built the wings while final assembly would have been carried out in Britain.
Overall, the UK would have carried out nearly 38 per cent of the work.
- 1 Disney heiress Abigail disowns her share of family profits in West Bank company
- 2 The secret report that helps Israel hide facts
- 3 'Women should not laugh in public,' says Turkey's Deputy Prime Minister in morality speech
- 4 Ebola virus: UK health officials issue warning to doctors as experts admit the outbreak 'is not under control'
- 5 Ross Burden dead: MasterChef and Ready Steady Cook star dies at age 45 after suffering from cancer
'Women should not laugh in public,' says Turkey's Deputy Prime Minister in morality speech
Richard Dawkins says 'date rape is bad, stranger rape is worse' on Twitter
Ross Burden dead: MasterChef and Ready Steady Cook star dies at age 45 after suffering from cancer
Zayn Malik on Israel-Gaza: One Direction singer bombarded with Twitter death threats after posting #FreePalestine
MH17 crash: Black boxes show plane suffered 'massive explosive decompression' following shrapnel hit
The secret report that helps Israel hide facts
A day in the life of Vladimir Putin: The dictator in his labyrinth
Woman and two children killed by mob in riots over 'blasphemous' Facebook post in Pakistan
Putin is 'thuggish, dishonest and reckless', says British ambassador to US
Boozy, ignorant, intolerant, but very polite – Britain as others see us
Were 'Poor Doors' added to mixed developments so wealthy residents don't have to go in alongside social housing tenants?
- < Previous
- Next >
iJobs Money & Business
£350 - £400 per annum + competitive: Orgtel: Project Manager (specializing in ...
£25000 per annum + OTE £40,000: SThree: Orgtel are seeking Graduate Trainee Re...
£45000 per annum + Benefits: Ashdown Group: ** HR Business Partner - Senior H...
£28000 - £32000 per annum + Benefits: Ashdown Group: PA / Team Secretary - Mat...