AFTER the funeral of King Fahd last summer, Jacques Chirac, the French president, made sure he was the first foreign dignitary to visit Saudi Arabia. He had several meetings with King Abdullah, the new ruler of the desert kingdom.

The visit was a calculated attempt to grab for France a share of Saudi air-defence contracts worth tens of billions of pounds that Britain was favourite to win.

But it looks as if Chirac has failed. Saudi officials are finalising a deal with Britain’s BAE Systems for the delivery of up to 72 Typhoons, as the export version of the Eurofighter is now known. The deal, initially for 24 aircraft, is expected to be signed by the end of June.

It will be a milestone for the Typhoon, which has struggled to secure export orders, as well as a coup for BAE Systems, the plane manufacturers’ British partner.

According to Merrill Lynch, the investment bank, the order will be worth £6 billion to BAE in aircraft sales alone. In all, the contract could bring in £31 billion in sales, maintenance, weapons and training between now and 2030. Spare parts account for £11 billion of the estimated total, personnel £9.5 billion and training £3 billion. However, the deal will not boost BAE’s profits until 2009, according to Merrill Lynch.

Failure to sell the Typhoon to Saudi Arabia would have dealt a blow to Anglo-Saudi relations, and put BAE jobs at risk.

An agreement between Britain and Saudi Arabia, known as Al Yamamah, dates back to the 1980s. It was secured by Margaret Thatcher and was Britain’s biggest export contract ever.

As prime contractor, BAE has supplied the kingdom with dozens of Tornadoes and Hawk jets, as well as training and other services. More than 5,000 of its staff are stationed in Saudi Arabia.

Last year Mike Turner, BAE Systems’ chief executive, was quoted as saying: “The objective is to get the Typhoon into Saudi Arabia. We have had £43 billion from Al Yamamah over the past 20 years and there could be £40 billion more.”

Britain exports £4 billion of goods and services to Saudi Arabia every year, and investment flows between the two countries have been rising.

For this reason, France’s Rafale was originally seen as an outsider to form the linchpin of the country’s future defences. But the French offering was being taken more seriously after the war in Iraq, when Britain’s siding with America was frowned on in the kingdom.

Senior diplomatic sources admitted that both France and Britain were in the running for the air-defence contracts. The threat prompted Tony Blair to raise the matter of defence contracts when he visited Saudi Arabia last year. The Saudis started to play hardball, reportedly demanding the return of dissidents in return for aircraft orders.

Blair’s lobbying, combined with BAE’s 20 years of co- operation with the Saudis finally tipped the balance in the Typhoon’s favour, with the Saudis set to sign this spring. So urgent is their need to modernise their defences, the first 24 planes will be diverted from Britain’s own Typhoon order.

The contract represents a remarkable turnround for the Typhoon. The four-nation plane programme has been plagued with problems since its inception 20 years ago. The costs overran and it was late into service. It was also dismissed as a cold-war relic because it lacked high-tech weaponry. Now it looks as if the Eurofighter, complete with new weapons, has flown to the assistance of BAE’s lucrative Saudi operations. And in it doing so, the aircraft’s entire export programme may have been saved.

The Saudi order will be taken as longed-for confirmation that the plane can be sold around the world. Norway, Switzerland, Turkey and Japan have all expressed an interest, but so far only Austria has bought it, with an order for 18 planes.

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