With the US taking its wallet to the Middle East this week and setting up defense agreements across the region, and considering the private feedback from yesterdays post, maybe its time to take a closer look at Saudi Arabia and the defense industry. Specifically, lets look at the current 3 year military purchase plan which is about to enter the 2nd year.Saudi Arabia has been actively upgrading their military since 2005, and the result was an enormous spending spree last year pretty much across the board. Saudi Arabia is gearing up for year 2 of that spending spree, and will complete the massive series of orders next year. Lets review.
First came the Typhoon (Eurofighter) MoU in December 2005. Ultimately, the deal was for 72 Eurofighters (still pending).
The UK government confirmed Friday that it has agreed a deal reportedly worth up to Pnds 10 billion (Dlrs 19bn) to sell Eurofighter Typhoon aircraft to Saudi Arabia.
The Ministry of Defence (MoD) said that it had signed an "understanding document" with the Saudi government "intended to establish a greater partnership in modernizing the Saudi Arabian armed forces."
"The required commercial principles have now been agreed which has initiated the purchase of Typhoon aircraft and the associated commitment to the industrial plan to be launched," the MoD said in a statement without giving any further details.
Then came the LAV.
Saudi Arabia has requested 724 Light Armored Vehicles (LAV) in a number of different variants, plus weapons, night-vision equipment, communications gear et. al. to modernize the Saudi Arabian National Guard (SANG). The total value, if all options are exercised, could be as high as $5.8 billion.
Then came 24 UH-60L Blackhawks.
The Government of Saudi Arabia has requested a possible sale of 24 UH-60L Utility/Assault Black Hawk helicopters, spare and repair parts, communications and support equipment, publications and technical data, personnel training and training equipment, contractor engineering and technical support services and other related elements of logistics support.
Next Saudi Arabia turned to France and went on a buying spree.
Defense-Aerospace.com has more specific details regarding the estimated EUR 6.9 billion/ $8.8 billion helicopter deal, however, which could involve as many as 132 aircraft of various types. These reportedly include:
64 NH Industries (EADS/ AugustaWestland) NH90s. 10 would be naval helicopters, with the other 54 being the TTH troop transport version (42 Royal Saudi Army, 12 National Guard).
12 EADS Eurocopter Tiger attack helicopters. Version not specified, but likely to be similar to the Spanish/French Tiger HAD which addresses some of the shortcomings of earlier versions.
20 EADS Eurocopter AS 532-A2 Cougar CSAR helicopters. The Cougar is the Eurocopter upgrade/successor to the Aerospatiale Super Puma, which is now used to designate the AS 332 civilian aircraft. The AS 532-A2 is a specially-developed combat search and rescue (CSAR) version.
32 EADS Eurocopter AS 550 Fennec light helicopters. Defense-Aerospace.com estimates this deal at EUR 300 million ($381 million at current conversion).
4 EADS Eurocopter AS 565 Panther naval CSAR helicopters. Note that the Panther is not connected to the larger Super Puma family; it is an AS 365 Dauphin derivative that uses more composites to improve stealth and corrosion resistance, and has upgraded systems.
In year one of their 3 year defense upgrade plan Saudi Arabia also made inquiries or purchases regarding upgrades (including US stuff) to their M1A1s, Apaches, F-15S, tankers (remember the Airbus/Boeing fiasco in Feb.?), Patriots, Light Artillery, a potential purchase of Rafale's, Tornado upgrades, M2 Bradleys, and HMMWVs.The plan was laid out and has been followed almost exactly as it was laid out. The upgrade to the F-15s for example includes new engines that were originally proposed in November of last year, as well as the JDAM (which still has to get through Congress). When the NYTs article said new ships, I knew it had to be the MMC GD LCS which has been specifically discussed, in fact the details have gone so far as to include a mine warfare command center and UUVs for mine warfare, thus why I mention virtually no module space even though the fact sheet says otherwise.
The LCS isn't a foregone conclusion though. If Saudi Arabia continues to follow the plan laid out last year, the plan this year will potentially include 48 Rafale's (although Russia and the US may try to get in on that bid), 4 frigates which I assume the LCS is being offered for, although in the past FREMM has been specifically mentioned, and 6-8 patrol corvettes which DCN (Fr) has had its eye on, but may also be competitively sought by other players.
If you think all this is interesting, wait until 2008, when Saudi Arabia is expected to buy 6-8 submarines, an order I know DCN is hoping to get, although after the unfavorable German reaction to the upcoming US announcement on military offerings, might include U-214s.Why does all this military sales stuff matter?
Because there is a huge unspoken geopolitical angle here the US is moving on, and the military sales to Saudi Arabia and other regional players has more to do with Oil than Iraq. There is going to be a lot of debate in Congress on this subject, and it could well expand beyond simple military sales. While it may look like sales of some bombs, boats, and planes and have the look and feel of an arms race, I have a different take. It looks to me a lot like what the US did in 1971 with rising gas prices. In my opinion, this is a preemptive economic strike on the Middle East players, rooted in history and intended to remind the region what it means to be a superpower.
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