* Dassault proposal described as uncompetitive
* UAE spoke to Eurofighter, Boeing over fighter jets
* Keen interest in arms in Gulf region
By Reed Stevenson and Praveen Menon
DUBAI, Nov 16 A long-awaited French deal
for Dassault to sell at least 60 Rafale warplanes to
the United Arab Emirates hit a new snag on Wednesday when the
Arab country's crown prince said proposed terms were
"uncompetitive and unworkable".
The deal, which had been in the works since 2008, was thrown
into doubt earlier this week when it became clear that the
world's fourth-largest oil exporter had asked for details of a
rival aircraft, the Typhoon built by the Eurofighter consortium.
"Thanks to President (Nicolas) Sarkozy, France could not
have done more diplomatically or politically to secure the
Rafale deal," Abu Dhabi Crown Prince Sheikh Mohamed bin Zayed,
deputy of the country's armed forces, said in a statement,
adding that Sarkozy's "personal intervention in this process has
sustained Dassault at the forefront of our considerations."
"Regrettably Dassault seem unaware that all the diplomatic
and political will in the world cannot overcome uncompetitive
and unworkable commercial terms," he said.
Officials at Dassault Aviation, which builds the
Rafale, declined to comment.
A government source close to the deal blamed the current
impasse on the "arrogance" of Dassault, despite French military
officials saying they were confident about securing a deal and
hopes of finalising the sale at the Dubai Air Show.
"There is a shared frustration in both the UAE and French
leaderships at the apparent arrogance of Dassault," the source
"Rather than using the strength of the bilateral
relationship to close the deal out they are attempting to use it
to hold out on pricing and a deal structure that hasn't changed
in more than a year and that has been significantly bettered by
The United Arab Emirates and its Gulf neighbours share the
West's concerns that Iran is using its nuclear energy programme
to develop weapons, a charge Tehran has denied. Saudi Arabia
inked a deal for U.S. arms worth nearly $60 billion a year ago.
The UAE is also in talks to buy Lockheed Martin's Terminal
High Altitude Area Defense, or THAAD, an advanced missile
The two deals, for the air defence and new combat planes,
could be worth as much as $17 billion.
COMPETITORS SMELL OPPORTUNITY
France said earlier this week it was still confident of
striking a first export deal for the Rafale and Defence Minister
Gerard Longuet said Paris remained in the final stage of talks.
French air force chief General Jean-Paul Palomeros told
Reuters the Emirates air force was "very keen with Rafale".
Yet after news of Eurofighter's pitch emerged, the deal
appeared to be blown open to greater competition, including from
Boeing's fighter jets.
The company said it had briefed UAE officials recently on
its F-15 and F-18 combat planes.
"We have not responded to a detailed set of requirements or
anything like that. We have been asked for information on both
platforms (F-15 and F-18)," Paul Oliver, its vice-president for
Middle East & Africa, International business development,
Defence, Space & Security, told Reuters in an interview.
"We have provided, through the U.S. government, information
on these platforms. We have been providing information off and
on for over a year."
Discussions between the UAE and Dassault were nearly
derailed a year ago when Boeing was first asked for technical
information on its warplanes.
France is struggling to secure a foreign buyer for the
Rafale, which is more developed than fourth-generation combat
aircraft but lags behind fifth-generation multi-role fighters
such as Lockheed Martin's F-35 Lightning II.
The UAE has pressed for the aircraft's engines to be
upgraded with extra thrust and for better radar, industry
sources have said, but Palomeros said UAE officials are
satisfied with the plane.
Both the Rafale and Typhoon warplanes were used in Libya
during NATO operations that helped topple Muammar Gaddafi.
The Eurofighter is built by Britain's BAE Systems,
Finmeccanica of Italy and European aerospace group
EADS on behalf of Germany and Spain.
Boeing, however, said there was increasing local interest in
its combat jets.
"There has been interest in the region. We have a couple of
other customers who have expressed interest in the F-18 (apart
from UAE)," said Boeing's Oliver. "They don't talk to me about
competitors... but it is the big news of the airshow. I believe
the UAE is looking at all their options."