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Saudi Defence Industry Strategy Takes Shape

Eurofighter_Typhoon_fighter_aircraft_saudi_Prince_Khaled_bin_Sultan

Saudi Arabia’s Assistant Defence and Aviation Minister Prince Khaled bin Sultan received the Kingdom’s first two Eurofighter Typhoon fighter aircraft at a ceremony hosted by BAE Systems at its Warton plant near Preston on June 10.

The Typhoon is among the most advanced and sophisticated jet fighter bombers in operation and Saudi Arabia will be the first country outside of Europe to take delivery of the aircraft.

Prince Khaled said that “the induction of the Typhoons into the air force will strengthen all three wings of the armed forces including the air force, navy and land forces and demonstrates the support of the government for the armed forces.”

The contract is vital to the fortunes of BAE Systems and has also saved the British government a good deal of embarrassment. The Saudis have been able to receive the new aircraft on a fast delivery schedule as a result of budget cuts by the UK Ministry of Defence which has resulted in the British RAF’s initial order for the aircraft being reduced. Without the Saudi order the company’s factory might have been closed.

Meanwhile, plans to develop military aircraft production in Saudi Arabia are moving ahead determinedly following the Kingdom’s agreement to purchase the fighter jets since the deal calls for most of the aircraft to be assembled in the Saudi Arabia.

In March 2008, Defence and Aviation Minister Crown Prince Sultan laid the foundation stone at King Abdulaziz Air Base in eastern province for a new centre to update and assemble systems for Saudi military aircraft.

The complex will be developed on a 300,000 square kilometre site to include a range of hangars, stores for hazardous materials, workshops, fuel storage, a water desalination plant and power station and other utilities and infrastructure.

Saudi Arabia signed an agreement to purchase 72 Typhoon Eurofighter in September 2007. The purchase, for which BAE Systems is prime contractor, is likely to be valued up to $40 billion or more in the long term as a result of additional support contracts.

The aircraft purchase, designated Project Salam, follows on from the Al Yamamah agreement forged between the UK and the Kingdom in 1985 that has involved the supply of Tornado fighters, Hawk and Pilatus trainer aircraft, warships, munitions, training and support services.

The programme, which has generated an estimated $75 billion of business for BAE Systems and associated sub-contractors, is now largely completed apart from ongoing support.

Its successor, Project Salam is to be supported by “substantial logistical and training packages” including the opportunity for British and Saudi air crews and ground technicians to train alongside each other in the UK.

This will deepen the UK’s involvement in the operational capability of the Saudi air force bringing the latter’s training standards on a par with those of one of NATO’s leading members.

BAE Systems is also committed to develop a “home market” operation in the Kingdom by creating an indigenous industrial capability for both local consumption and export markets.

Following delivery of the first 24 Typhoon aircraft to the Kingdom over the next 18 months plans are moving ahead to complete final assembly of the remaining 48 Typhoon aircraft in Saudi Arabia. Negotiations are believed to be under way that would see an additional 24-48 Typhoons assembled locally.

BAE Systems is already one the largest private sector employers in the Kingdom with 4,600 personnel half of whom are Saudis. The company says that the kingdom’s economic reform programme and new laws attracting foreign direct investment have made it easier to plan for a more advanced stage involving both equipment assembly and original equipment manufacturing in addition to repair and maintenance.

Key partnership organisations in Saudi Arabia are said to be Alsalam Aircraft, Advanced Electronics, Aircraft Accessories and Components and Saudi Development and Training. A logistics management operation is being set up and Granada Enterprises, “a property management vehicle,” has also been established it says.

BAE believes that as it develops its own engineering capability in the Kingdom, the support of international associates and suppliers is also drawn in. “This ability to act as a magnet for further growth is a key outcome of sun-rise industries. In turn, attracting component suppliers in the defence sector spawns further knowledge and technology transfer.”

According to Prince Khaled Saudis are to be given priority in jobs related to the assembling and maintenance of the planes. A”A training programme will continue in ordeer to keep pace with the latest developments in technology pertaining to the aircraft.”

Global Arab Network

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