Top British defence contractor revealed it is making good progress on talks with Saudis over the order for 72 Eurofighter Typhoon jets but added they are far from reaching an agreement on prices.
“Of the 72 aircraft contracted under the Salam programme the first squadron of 24 have now been delivered to the Royal Saudi Air Force (RSAF),” BAE said in an email sent to Reuters on Tuesday.
“In terms of the location of the final assembly of the last 48 aircraft, conversion to Tranche 3 and formalisation of price escalation, good progress has been made with budgets approved in December 2011 through the royal decree.
“Negotiations on price escalation will continue into 2012.”
BAE Systems said a Saudi royal decree signed off at the end of 2011 orders the release of some $2.4bn on top of the existing programme commitment for a series of enhancements to the programme.
The $6.38 billion worth Salam deal was signed in 2007 between the Saudi Ministry of Defence and London-based BAE Systems.
Reports suggest British Prime Minister David Cameron and Defence Secretary Philip Hammond are lining up in London to meet Saudi Arabia’s Defence Minister Prince Salman bin Abdulaziz later on Tuesday.
The Gulf Kingdom is a key Western ally and a major buyer of British-made defence equipment.
Many political analysts see Prince Abdulaziz as a potential candidate to rule the conservative kingdom in near future. He is responsible for securing multi-billion dollar arms purchases with Western countries.
According to two Western defence sources, Saudi Arabia placed a $29.4bn order for new Boeing F-15 jets in late 2011 and is in the early stage of talks to increase its Typhoon order by as many as 48 aircraft.
The sources added that the Saudi order to convert the Typhoon jets to a Tranche 3 variant will see the addition of missile and radar technology.