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Nato surveillance aircraft ‘to be built by EADS’

PARIS, April 15 (AFP) – NATO is set to award a defence contract for a fleet of surveillance aircraft worth up to EUR 4 billion (USD 4.8 billion) to a consortium led by European Aeronautic Defence and Space Company, the Financial Times reported Thursday.

NATO’s decision on what would be its largest defence contract for decades will not be formalised until next month, the newspaper said, quoting alliance and industry officials.

But chief procurement officers in NATO capitals have only until Friday to object to the EADS-led group, which also includes US company Northrop Grumman Corp, it said.

NATO hopes the decision to proceed with the long-delayed programme will signal the renewed commitment of the transatlantic alliance following the crisis over the Iraq war, the newspaper said.

Surveillance aircraft are used by the military as flying eyes and ears to monitor activity on the ground, at sea or in the air.

But the deal remains at risk due to a challenge by Raytheon Company, which also competed for the contract. The US company has accused NATO of pushing through the EADS bid under US pressure, it said.

According to Western diplomats, the US has backed the EADS contract because of the involvement of Northrop Grumman, which builds the US Air Force’s J-Stars ground surveillance aircraft.

The United States had pushed NATO to buy J-Stars outright, but when several European members objected, Northrop joined EADS to produce a similar aircraft using a body by Airbus, EADS’ aircraft division.

Shares in EADS climbed in early Paris trade, bucking the overall market’s decline, on the report.

EADS shares were trading up 1.80 percent at EUR 19.79, while the CAC-40 index fell 0.24 percent to 3,724.48 points.

“This would be very good news for the company and it appears to be a large order,” said one Paris dealer.

© AFP                                                   

                                                         Subject: French news