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Tuesday, October 04, 2005

DoD OKs $2 bln in possible weapons sales to Saudi Arabia

By Rebecca Christie
Last Update: 10:32 AM ET Oct. 4, 2005

WASHINGTON (MarketWatch) -- The Pentagon on Monday approved more than $2 billion in possible weapons sales to Saudi Arabia, including combat vehicles, aircraft parts and battlefield communications systems.

The Defense Security Cooperation Agency notified Congress of three potential deals. It said the sales would help the U.S. by contributing to the security of a friendly country that "continues to be an important force for political stability and economic progress in the Middle East."

The largest of the proposed sales is a $918 million plan to modernize the Saudi Arabia National Guard. Saudi Arabia has invited General Dynamics Corp. (GD), BAE Systems PLC (BA.LN) and Australian Defense Industries to present candidate systems.

Other contractors expected to participate include Harris Corp. (HRS), ITT Industries Inc. (ITT), Motorola Corp. (MOT) and Fabrique Nationale Herstal USA, part of Belgium's Herstal Group.

Saudi Arabia is interested in 144 armored personnel carrier vehicles, about 55,000 rifles and nearly 200 vehicle radio systems, among other equipment. Prospective purchases also include trucks, tankers and buses that are not considered major defense equipment.

There are currently 219 U.S. government personnel and 541 contractor representatives in Saudi Arabia to support the modernization program, the defense agency said. It said the program will make Saudi Arabia a more capable partner in fighting terror by giving it more ability to defeat threats to regional stability.

In addition to the Saudi Arabia National Guard modernization, the Pentagon also approved a potential $760 million in aircraft maintenance support for a wide variety of aircraft and missiles. And it approved a possible $401 million sale of battlefield communications equipment from Data Link Solutions, a joint venture of BAE Systems and Rockwell Collins Inc. (COL).

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