Eurofighter suspends Norway, Denmark sale efforts

OSLO Fri Dec 21, 2007 8:39am EST

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OSLO Dec 21 (Reuters) - European defence contractor Eurofighter has suspended talks to supply new fighter jets to Norway and Denmark and said on Friday it was dissatisfied with the way the competitions were being run.

NATO members Norway and Denmark are considering buying around 50 fighters each to replace ageing F-16s. They have been considering the Eurofighter Typhoon, the U.S. Joint Strike Fighter (JSF) and the Swedish JAS Gripen.

Norwegian media reported that Eurofighter, a consortium of BAE Systems (BAES.L), Airbus parent EADS EAD.PA and Italy's Finmeccanica (SIFI.MI), suspected that the competition was tilted in favour of the JSF produced by Lockheed Martin (LMT.N).

Eurofighter said in a letter received by the Norwegian defence ministry on Dec. 20 that it had grown "ill at ease with the current process," but a spokesman for EADS declined to say the consortium felt the contest favoured the JSF.

"The reasons for our decision are recent adjustments to the timing and structure of the assessment process in both countries," EADS spokesman Theodor Benien said.

He emphasised that suspending the process did not mean pulling out altogether.

"We do not wish to rule out altogether our future re-engagement in the programme," Eurofighter said in the letter, a copy of which was provided to Reuters.

Norwegian Defence Minister Anne-Grete Stroem-Erichsen said in a statement: "The Norwegian government has expressed very clearly that we want a fair and equal competition between the three candidates."

"We have allocated considerable resources in order to achieve this and we have focused on a structured and transparent process in close dialogue with the candidates. Our goal is still to have three candidates until the end of 2008, but the programme will continue with or without Eurofighter," she said.

Norway has said it aims to make a decision on new combat aircraft in 2008. The 48 aircraft are estimated to cost around 30-40 billion Norwegian crowns ($5.37 billion - $7.16 billion), a huge investment for a nation of 4.6 million people.

The Swedish JAS Gripen is built by a consortium of defence group Saab (SAABb.ST) and BAE Systems, which hopes that the Nordic neighbours will find common ground in jet procurement.

"We still have the impression that we have been clearly given by the Norwegian government that this is an open contest -- on equal terms," Saab AB chairman Marcus Wallenberg told reporters in Oslo. "We want to show to the Norwegian defence that we have the best planes."

"We are two neighbours. We think we can offer something as a neighbour. There is a good foundation for industrial cooperation," Wallenberg said.

(Reporting by John Acher and Richard Solem; Editing by David Cowell)

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