August 27, 2013 / 3:31 PM / in 4 years

UPDATE 2-Swiss parliamentary committee backs buying Gripen fighters

* Switzerland plans to buy 22 Gripen jets

* Parliament to discuss deal in September

* Swiss people may have final say (Adds Saab reaction)

By Silke Koltrowitz

ZURICH, Aug 27 (Reuters) - A parliamentary committee has backed Switzerland’s purchase of 22 Gripen fighter jets from Sweden’s Saab, clearing a major hurdle for the $3.4 billion deal.

The security committee of Switzerland’s lower house of parliament supported the government’s proposal to purchase the fighters by 14 to 9 votes, committee president Chantal Gallade told journalists in Winterthur.

The financing package was also approved by a large majority, she said.

SAAB shares jumped almost 6 percent on the news, which had been revealed by a Swiss newspaper ahead of the media briefing.

The lower house of parliament will discuss the deal on Sept. 11. It is likely to follow the committee’s recommendation, but even if both houses of parliament approve the deal it can still be derailed by a popular referendum.

“We are naturally very pleased by the decision of the security committee,” said Lennart Sindahl, senior executive vice president and head of Saab’s aeronautics business area, in a statement, adding the company was continuing to assemble the pre-production Gripen E.

Gallade said the committee, which had postponed discussing the deal in April awaiting further details, had obtained reassuring information on arbitration procedures and penalty payments. The two parties agreed on an upfront payment of 40 percent of the total sum, she said.

“The majority of the committee thinks the risks are manageable,” Gallade said. “It estimates we don’t need a Rolls-Royce but a machine that meets the needs of our air force.”

Switzerland opted for the Gripen as a cheaper alternative to the Eurofighter Typhoon, developed by a consortium of BAE , Finmeccanica and EADS, and Dassault Aviation’s Rafale jet.

Switzerland, which hasn’t fought an international war for 200 years, wants the Gripen jets to replace its aging Northrop F-5 Tiger fighters, a move unpopular with some because it will require cost cuts in other areas, such as education.

The deal has already been delayed several times. In March, the upper house of parliament halted the purchase when it approved it in principle but voted against the required financing package.

The upper house will discuss the matter again on Sept. 18.

In order to sweeten the deal, Saab has pledged to find Swiss suppliers for major components of the jets.

Sindahl said Saab’s suppliers had so far signed 456 contracts with 117 Swiss companies valued at 315 million Swiss francs.

In Switzerland, a referendum can be held on federal laws if at least 50,000 people or eight cantons have petitioned for one within 100 days of the item’s official publication. (Reporting by Silke Koltrowitz; Editing by Mark Potter and Louise Heavens)

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