French eye huge deals as Sarkozy visits Saudi

19th November 2009, Comments 0 comments

France had its eye on Riyadh's massive shopping list for new infrastructure, power plants, trains, aircraft and defence equipment as President Nicolas Sarkozy arrived in Saudi Arabia.

RIYADH - Although Sarkozy's overnight stay at King Abdullah's farm in the desert outskirts of Riyadh will focus on mainly regional political issues, business opportunities for French industry are a key part of the the two leaders' growing relationship.

Tentatively on the menu for discussions are France's aim to sell the Saudi Navy three FREMM frigates, helicopters for the security forces and high-speed train equipment for the 450 kilometre (275 mile) Haramain railway to link the western cities of Mecca, Jeddah and Medina.

Also pending is a Saudi-French pact on sharing nuclear technology, which Paris hopes will pave the way for France to help develop nuclear power plants in Saudi Arabia as its energy demand soars.

The oil giant has embarked on a five-year, 400 billion dollar (267 billion euro) plan to recycle petrodollars into infrastructure, hospitals, schools and other civil works, as well as the defence sector.

The prospect has politicians and industrialists beating a path to Riyadh from the world over.

French exports to Saudi Arabia have soared in recent years, hitting 4.1 billion dollars last year, triple the level of 2003.

But France was still only eighth as a seller to the kingdom, and its market share fell from 4.1 percent in 2000 to 3.5 percent last year,according to Banque Saudi Fransi, a local unit of the Credit Agricole group.

Heavy competition has come from both traditional partners like the United States and Britain, and especially from newcomers like South Korea and China, which have leveraged their huge imports of Saudi oil into major construction deals.

Still, French companies have scored big in recent years.

In December 2007 Airbus signed a deal to sell 22 A320s to Saudi Airlines. The Franco-German-Swiss defence conglomerate EADS, Airbus's parent, won a project in July to build a high-tech security fence on 9,000 kilometres (5,600 miles) of the country's border, reportedly worth about two billion euros (2.97 billion dollars).

In April defence group Thales was awarded a 453 million dollar (302 million euro) contract to help build the ambitious North-South Railway.

Meanwhile, airport design and management group Aeroports de Paris is doing studies for a new 750,000 square metre (8.1 million square foot) terminal for the international airport in Jeddah, and is also angling to build airports in Taif and Medina.

"Saudi Arabia is one of the top markets because of the spending," said a French infrastructure developer who accompanied Trade Minister Anne-Marie Idrac on a visit to Riyadh at the beginning of November.

Sarkozy, on his third trip to the kingdom in two years, has put substantial effort into wooing Riyadh. Besides his own visits, Minister of Economic Affairs Christine Lagarde visits at least yearly.

"France's overtures in the Gulf under President Sarkozy have become deeply commercial in nature, sometimes filling a vacuum created by the United States and Britain" which have lost some ground in Saudi Arabia, said the Banque Saudi Fransi report.

France has lagged especially in the defence sector, where the Saudis have shown a preference for British and American equipment, especially lucrative fighter jets.

Meanwhile on Sunday a top Russian defence exports official was in the capital for talks with Saudi counterparts on what is believed a multi-billion-dollar deal.

Competition is flooding in from all around, too.

In October Belgium's Prince Philippe led over 200 Belgian businessmen on a visit to the country.

Earlier this year Brazil's President Lula passed through with scores of businessmen.

And in his first public appearance, in October new US Ambassador James Smith pledged to boost US business in the country, noting as well that although the value of US sales has risen, the Americans "are losing market share."

Paul Handley/AFP/Expatica

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