Identifier
Created
Classification
Origin
06RIYADH5907
2006-07-25 12:18:00
SECRET
Embassy Riyadh
Cable title:
CROWN PRINCE SIGNS TWO DEFENSE AGREEMENTS IN
how-toVZCZCXRO0320 PP RUEHDE DE RUEHRH #5907/01 2061218 ZNY SSSSS ZZH P 251218Z JUL 06 FM AMEMBASSY RIYADH TO RUEHC/SECSTATE WASHDC PRIORITY 9957 INFO RUEHZM/GULF COOPERATION COUNCIL COLLECTIVE RUEHFR/AMEMBASSY PARIS 0642 RUEHLO/AMEMBASSY LONDON 2708 RUEHJI/AMCONSUL JEDDAH 7503 RUEKJCS/SECDEF WASHINGTON DC RUEKJCS/JOINT STAFF WASHDC RHMFISS/HQ USCENTCOM MACDILL AFB FL RUCPDOC/DEPT OF COMMERCE WASHDC
S E C R E T SECTION 01 OF 02 RIYADH 005907
SIPDIS
SIPDIS
E.O. 12958: DECL: 07/18/2016
TAGS: MARR MASS BEXP SA
SUBJECT: CROWN PRINCE SIGNS TWO DEFENSE AGREEMENTS IN
PARIS--BUT NO NEW CONTRACTS
REF: A. A: RIYADH 5450
B. B: JEDDAH 0481
S E C R E T SECTION 01 OF 02 RIYADH 005907
SIPDIS
SIPDIS
E.O. 12958: DECL: 07/18/2016
TAGS: MARR MASS BEXP SA
SUBJECT: CROWN PRINCE SIGNS TWO DEFENSE AGREEMENTS IN
PARIS--BUT NO NEW CONTRACTS
REF: A. A: RIYADH 5450
B. B: JEDDAH 0481
1. (C) Crown Prince Sultan, who is also the Saudi Minister
of Defense and Aviation, reportedly signed two defense
agreements with France during his July 20 visit to Paris.
Media reports have suggested that these agreements could lead
to Saudi purchase of French tanker aircraft, helicopters, and
other equipment. However, Embassy contacts report that no
new deals were finalized, and Saudi purchase of French
military hardware remains uncertain. A July 24 article in
Paris La Tribune notes "the disappointment felt by certain
industrialists who were expecting a great deal more from the
visit." One of the agreements signed was reportedly a
technical addendum to a 1982 KSA-France defense cooperation
agreement.
--------------
REFUELING AIRCRAFT: BOEING VS. AIRBUS
--------------
2. (C) A Boeing representative told Emboffs on July 23 that
the signed agreements did not yet commit the SAG to purchase
Airbus-330 refueling tankers, instead of the Boeing-767
configuration. He said that according to his contacts within
the Ministry of Defense and Aviation (MODA),the SAG might
sign a contract by the end of 2006 for the purchase of three
Airbus tankers, but that is not a given. In the meantime,
Boeing intends to urge the SAG to delay its decision on the
tankers until after the USAF has decided which tanker
aircraft it will purchase.
3. (C) The Boeing representative also said that the
agreements signed in Paris establish several "phases" for
Saudi-French defense cooperation. The first phase apparently
covers the purchase of tankers and helicopters, with
subsequent phases to possibly include tanks, ships, and the
Rafale fighter aircraft.
--------------
HELICOPTERS
--------------
4. (C) A representative of Sikorsky Aircraft, which is also
competing against France for Saudi business, told Emboffs
that the agreements did not appear to be "threatening."
Noting that the SAG had recently agreed to purchase 12 of
Sikorsky's Schweizer-333 training helicopters and the Bush
administration's recent approval to sell the SAG 24
Blackhawks, the Sikorsky representative commented, "we're on
a roll." (Comment: In May 2006, France had reportedly
discussed with the SAG the sale of Super Puma search and
rescue helicopters (Ref A). Sikorsky Aircraft's S-92
helicopter appears to be the only competitor to the Super
Puma that the SAG is considering. End Comment.)
--------------
FRENCH AMBASSADOR DOWNPLAYS ANTICIPATED DEALS
--------------
5. (U) On July 18, prior to the Paris meeting, French
Ambassador to Saudi Arabia Charles D'Aragon reportedly told
Al-Hayat newspaper that the main objective of the Crown
Prince's trip was not to discuss defense contracts, but was
to talk about regional issues, particularly Lebanon. The
French Ambassador also denied that President Chirac walked
away from his March visit to Riyadh empty handed. He told
Al-Hayat that the anticipated defense deal "was not refused
by the Saudis, but was only postponed, which means that there
is an approval in principle."
--------------
COMMENT
--------------
6. (S) While details of the two agreements that the Crown
Prince signed in Paris are still emerging, it appears
that--as was the case during Chirac's March visit to the
Kingdom--the French have again failed to secure any new
contracts with the SAG. The French Ambassador's statements
just before the visit downplayed some of the high
expectations within the defense industry. Nevertheless, the
U.S. defense contractor community as a whole remains
concerned that France is poised to sign several major deals
RIYADH 00005907 002 OF 002
with the SAG (Reftels).
7. (S) The two U.S. contractors (Boeing and Sikorsky) that
appear to be most immediately affected by the Paris
agreements appear to have gained some time to continue
lobbying the SAG to buy American. In that regard Post has
received a signed letter from Commerce Secretary Gutierrez to
Crown Prince Sultan endorsing Boeing's bid for the tanker
deal. Post will deliver the letter to the Crown Prince once
he returns to the Kingdom. End Comment.
OBERWETTER
SIPDIS
SIPDIS
E.O. 12958: DECL: 07/18/2016
TAGS: MARR MASS BEXP SA
SUBJECT: CROWN PRINCE SIGNS TWO DEFENSE AGREEMENTS IN
PARIS--BUT NO NEW CONTRACTS
REF: A. A: RIYADH 5450
B. B: JEDDAH 0481
1. (C) Crown Prince Sultan, who is also the Saudi Minister
of Defense and Aviation, reportedly signed two defense
agreements with France during his July 20 visit to Paris.
Media reports have suggested that these agreements could lead
to Saudi purchase of French tanker aircraft, helicopters, and
other equipment. However, Embassy contacts report that no
new deals were finalized, and Saudi purchase of French
military hardware remains uncertain. A July 24 article in
Paris La Tribune notes "the disappointment felt by certain
industrialists who were expecting a great deal more from the
visit." One of the agreements signed was reportedly a
technical addendum to a 1982 KSA-France defense cooperation
agreement.
--------------
REFUELING AIRCRAFT: BOEING VS. AIRBUS
--------------
2. (C) A Boeing representative told Emboffs on July 23 that
the signed agreements did not yet commit the SAG to purchase
Airbus-330 refueling tankers, instead of the Boeing-767
configuration. He said that according to his contacts within
the Ministry of Defense and Aviation (MODA),the SAG might
sign a contract by the end of 2006 for the purchase of three
Airbus tankers, but that is not a given. In the meantime,
Boeing intends to urge the SAG to delay its decision on the
tankers until after the USAF has decided which tanker
aircraft it will purchase.
3. (C) The Boeing representative also said that the
agreements signed in Paris establish several "phases" for
Saudi-French defense cooperation. The first phase apparently
covers the purchase of tankers and helicopters, with
subsequent phases to possibly include tanks, ships, and the
Rafale fighter aircraft.
--------------
HELICOPTERS
--------------
4. (C) A representative of Sikorsky Aircraft, which is also
competing against France for Saudi business, told Emboffs
that the agreements did not appear to be "threatening."
Noting that the SAG had recently agreed to purchase 12 of
Sikorsky's Schweizer-333 training helicopters and the Bush
administration's recent approval to sell the SAG 24
Blackhawks, the Sikorsky representative commented, "we're on
a roll." (Comment: In May 2006, France had reportedly
discussed with the SAG the sale of Super Puma search and
rescue helicopters (Ref A). Sikorsky Aircraft's S-92
helicopter appears to be the only competitor to the Super
Puma that the SAG is considering. End Comment.)
--------------
FRENCH AMBASSADOR DOWNPLAYS ANTICIPATED DEALS
--------------
5. (U) On July 18, prior to the Paris meeting, French
Ambassador to Saudi Arabia Charles D'Aragon reportedly told
Al-Hayat newspaper that the main objective of the Crown
Prince's trip was not to discuss defense contracts, but was
to talk about regional issues, particularly Lebanon. The
French Ambassador also denied that President Chirac walked
away from his March visit to Riyadh empty handed. He told
Al-Hayat that the anticipated defense deal "was not refused
by the Saudis, but was only postponed, which means that there
is an approval in principle."
--------------
COMMENT
--------------
6. (S) While details of the two agreements that the Crown
Prince signed in Paris are still emerging, it appears
that--as was the case during Chirac's March visit to the
Kingdom--the French have again failed to secure any new
contracts with the SAG. The French Ambassador's statements
just before the visit downplayed some of the high
expectations within the defense industry. Nevertheless, the
U.S. defense contractor community as a whole remains
concerned that France is poised to sign several major deals
RIYADH 00005907 002 OF 002
with the SAG (Reftels).
7. (S) The two U.S. contractors (Boeing and Sikorsky) that
appear to be most immediately affected by the Paris
agreements appear to have gained some time to continue
lobbying the SAG to buy American. In that regard Post has
received a signed letter from Commerce Secretary Gutierrez to
Crown Prince Sultan endorsing Boeing's bid for the tanker
deal. Post will deliver the letter to the Crown Prince once
he returns to the Kingdom. End Comment.
OBERWETTER