Saudis order 72 Eurofighters for $8.86 billion

Saudi Arabia has ordered 72 Eurofighter Typhoon fighter jets from the UK at a cost of £4.43 billion ($8.86 billion, Rs35,840 crore). This is the biggest single overseas order for the aircraft, ever.

The price is similar to what the Royal Air Force (RAF) paid for aircraft, the Saudi ministry of defense and aviation said. BAE Systems will assemble the Eurofighters at its plant in Warton, in northwest England.

The 1,500-mph (2,400 kph) supersonic Eurofighter is Europe''s largest military aircraft venture. The Saudi contract will help safeguard 100,000 jobs and boost revenue at London-based BAE, as well as partners European Aeronautic, Defence & Space Co (EADS) and Finmeccanica SpA of Italy.

BAE sees this as a huge boost, because it expects service and spares contracts, orders for its Hawk advanced jet trainer aircraft, as well as orders for missile systems to follow, giving the company incremental volumes and profits over the next 30 years of the aircraft''s expected operational life. The company employs about 4,600 people in Saudi Arabia.

The UK ministry of defence (MoD) said the first 24 planes would come from an existing contract for 232 aircraft. BAE will invest in Saudi companies, train thousands of Saudi pilots and military personnel, and maintain and repair equipment. The project will be known as ''Project Salam'', the MoD said.

EADS is the largest shareholder in Eurofighter GmbH, which is based in Hallbergmoos, Germany. It has a 46-per cent stake. BAE has 33 per cent and Italy''s Finmeccanica SpA holds 21 per cent through its Alenia Aeronautica subsidiary.

BAE has provided Tornado fighter jets, Hawk trainers, and components to Saudi Arabia since 1985. It has also handled airbase management. The Saudis are expected to retire the Tornados from frontline service, and progressively move Tornado pilots to the Typhoons.

The deal comes just 12 weeks after the US justice department started an investigation into alleged corruption tied to Saudi weapons purchases from BAE Systems. Nine months ago, the UK Serious Fraud Office dropped a probe of into BAE sales to Saudi Arabia, citing national security concerns.

The UK newspaper, The Guardian and the British Broadcasting Corporation had reported that BAE had made secret payments of £1 billion to former Saudi ambassador to the US Prince Bandar bin Sultan, citing the UK investigation. BAE has denied wrongdoing and Bandar called the reports "false".

Britain dropped its probe in December after an intervention by the then Prime Minister Tony Blair. He said the probe could have "devastating" consequences for the country''s relations with Saudi Arabia, and for national security, especially the fight against terrorism.

The Eurofighter programme was conceived 20 years ago during the cold war, for air defence against Soviet MiG warplanes. It is jointly owned by the UK, Germany, Italy and Spain. The first aircraft went into production in 1998 with manufacturing at four plants in the partner countries. Deliveries began in 2003 and are expected to extend until 2014. The four countries are scheduled to buy a total of 620 aircraft, led by Britain''s order for 232.

The Eurofighter is also competing for orders in India, Greece, Japan, Turkey and South Korea. A total of 127 Eurofighters have been delivered so far.