The Government of UK and the Kingdom of Saudi Arabia have finally agreed on the price escalation terms relating to the Eurofighter Typhoon airplane under the Salaam programme.
Cash settlement is expected to follow this pricing agreement, commencing in the early part of 2014.
Ian King, Chief Executive, BAE Systems, said, "This is an equitable outcome for all parties, I am pleased that we have been able to conclude this negotiation which builds on our long standing relationship with this much valued customer".
In 2005, talks were underway for a Saudi purchase of 72 Eurofighter Typhoon Tranche 2 airplanes, said to be worth $71 billion, from Britain’s BAE Systems – with an important set of conditions on the Saudi side. After certain period of uncertainties, the contract was finally signed in September 2007, followed by an extension contract worth about $2.7 billion signed in June 2013 for support through to 2017.
The UK-Saudi cooperation program, known as “Project Salaam” involves BAE Systems investment in local Saudi companies, development of an industrial technology plan, logistics support and suitable training for thousands of Saudi nationals who will provide through-life support for the fleet.