Wednesday, November 16, 2011

UAE, tough negociations on the Rafale deal

UAE, wednesday 16, Dubai Airshow.

"Thanks to French President Sarkozy, France could not have done more diplomatically or politically to secure the Rafale deal. Bi-lateral relations have never been stronger and his constant personal intervention in this process has sustained Dassault at the forefront of our considerations. Regrettably Dassault seems unaware that all the diplomatic and political will in the World cannot overcome uncompetitive and unworkable commercial terms."

This is how wednesday 16 began for Dassault: a straight  and unequivocal declaration by Abu Dhabi Crown Prince Sheikh Mohamed bin Zayed reported by WAM the Emirates News Agency
The news, rapidly spread all over the web and media like a shockwave raising one question: does that mean  the negociations are over and the deal is as good as dead ?

Well, even if the words are quite direct, they are also very precise : First the role of the French President in the negociations is saluted, meaning that there is no polical issue between France and the UAE. Then Dassault is pointed out for the price they ask for the 60 jets. I interpret that as a direct request from the Crown Prince to the French presidency to put pressure on Dassault in order to lower the price of the whole Rafale package.

So, is the deal dead ? Apparently no, or at least not yet. According to a French source quoted by Reuters, negociations are still ongoing and the Crown Prince declaration would be part of the trading "game". Indeed, the UAE are well aware that Switzerland and India are also about to sign for either the Rafale or the Typhoon in the following weeks. Therefore the Typhoon RFP and the public statement of wednesday morning are puting considerable pressure on Dassault. As a consequense, a Rafale failure in the UAE could put the French manufacturer in a very bad position in India. Clearly, Eurofighter Gmbh RFP announcement was a smart move, executed with a perfect timing. But as a matter of fact, the chess game is not over yet.

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