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France, UAE Close In on Spy Sat Deal

Sep. 1, 2014 - 01:54PM   |  
By AWAD MUSTAFA and PIERRE TRAN   |   Comments
The United Arab Emirates is seeking tech transfer as part of talks on purchasing two Pleiades-type satellites.
The United Arab Emirates is seeking tech transfer as part of talks on purchasing two Pleiades-type satellites. (CNES artist's conception)
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DUBAI AND PARIS — The United Arab Emirates and France are expected to finalize the Falcon Eye spy satellites deal within the coming weeks while looking into the purchase of 40 Dassault Rafale fighter jets.

A UAE source close to the negotiations told Defense News that the discussions on the deal were completed and French Defense Minister Jean-Yves Le Drian is expected soon in the UAE.

“For the Falcon Eye deal to proceed there is a need for high level of technology transfer, and for that we have negotiated the possible purchase of 40 Rafale jets with the overhaul of the Mirage 2000 fleet,” the source said.

The contract for the UAE to purchase two high resolution Pleiades military observation satellites has faced resistance from Abu Dhabi. Under the US $930 million deal — signed July 22 last year by Sheikh Mohammed Bin Zayed al-Nahyan, Crown Prince of Abu Dhabi and deputy supreme commander of the armed forces, and Le Drian — delivery was set for 2018, along with a ground station.

The deal is the first major contract between France and a Gulf Cooperation Council country concerning sensitive intelligence satellite technology.

The satellites are provided by prime contractor Airbus Defence and Space and payload-maker Thales Alenia Space, and as part of the deal, 20 engineers will be trained to use the new equipment.

The first signs of a problem appeared in January when a UAE source said the satellites contained two specific US-supplied components that provide a back door to the highly secure data transmitted to the ground station, meaning all data could be transmitted to a third, unauthorized party.

Since the announcement of the discovery, Le Drian has been shuttling between Paris and Abu Dhabi to seal the deal.

The source said in June that the UAE was insisting on technology transfer before restarting negotiations with France to purchase the satellites.

A further delay occurred in gaining authorization of export of sensitive US technology, which required resolving. When President François Hollande paid a state visit to America this year, he received an assurance from President Barack Obama the clearances would be given. But the contract deadline lapsed, and talks between Paris and Abu Dhabi restarted on the terms and conditions of the new deal.

The US has since granted an export license for the satellite components, which solved that issue.

Le Drian was expected to arrive before the end of August, the source said, but has been delayed due to “technical” issues. The French Embassy in Abu Dhabi, however, confirmed that Le Drian “will certainly come in the following weeks.”

French industry sources said there are high hopes for a new deal to be struck. “We’re on the right track,” said an Airbus Defence and Space spokesman. “The lights are green.”

Thales Alenia Space, a joint venture between Thales and Finmeccanica, declined comment because Airbus DS is the prime contractor.

“Everything is going well,” a French defense spokesman said. There is agreement on technology, economics and political issues, he said. “There are no problems. France is politically committed to reaching a conclusion on the contract,” he added.

“A new contract has been drawn up, all the companies must sign, and that signing is expected to take a couple of weeks,” an industry executive said. “The bottles of champagne have been put on ice for the celebrations.”

For two years, Le Drian has worked hard to renew close ties with the UAE — seen as a key regional player and a significant export prospect — as the belea­gu­ered French industry needs foreign deals. France has sold little military equipment to the gulf nation since Abu Dhabi bought the Mirage 2000-9 fighter in the 1990s. ■

Email: amustafa@defensenews.com; ptran@defensenews.com.

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