BAE Systems is confident of concluding talks with Saudi Arabia to adapt the terms of the country's Project Salam acquisition of 72 Eurofighter Typhoons, but has confirmed that the deal's increased price remains a topic of discussion.
The Royal Saudi Air Force has so far received a first batch of 24 Typhoons under a deal signed in 2007, with these having been completed using BAE's final assembly line for the type in Warton, Lancashire, northwest England.
Riyadh has stepped back from its original plans to assemble the remaining 48 aircraft in Saudi Arabia, and instead favours the establishment of a domestic facility to perform maintenance work and future upgrades to the Eurofighter.
© Geoffrey Lee/Eurofighter
BAE revealed in February 2011 that it was discussing completing the remaining Typhoons in the UK, and that its customer was also seeking to have its last 24 examples adapted "for subsequent insertion of Tranche 3 capability". This referred to the possible introduction of equipment such as a developmental active electronically scanned array radar and advanced air-launched weapons.
In a trading statement issued on 4 January, BAE said: "Good progress on these discussions has been made in recent weeks, with budgets approved in the Kingdom [of Saudi Arabia] in December on all items other than the price escalation, where negotiations will now continue into 2012."
Funding has also been put in place to deliver the next five years of support for a broad-ranging Saudi/British defence cooperation programme, it added, with this "including an upgrade of the training environment".
Formal contracts linked to the remainder of Project Salam and the defence cooperation programme "are being progressed" in Saudi Arabia, according to BAE.
The development comes as Riyadh has also signed an agreement linked to a proposed $29.4 billion programme to upgrade 70 of its existing Boeing F-15S fighters and acquire 84 new-generation F-15SAs.