Mohammed bin Salman‘s replacement of Mohammed bin Nayef as crown prince on June 21 is expected to trigger more shifting sands in the world of Saudi Arabian defence contract negotiations. Although caught off its guard, France still has some cards up its sleeve when competing with US rivals for contracts.
Almisehal doing well
Although Mohammed bin Nayef has been taken out of the game, the Nayef clan remain central players in Saudi Arabia’s political and business circles. The new interior minister, Abdelaziz bin Saud bin Nayef, is the son of Saud bin Nayef, the governor of the Eastern province who is very close to the defence agent Adil Almisehal. Both men work principally for General Dynamics but Almisehal has also been representing French companies involved in the final negotiations for the huge Saudi Fransi Military Contract (SFMC) along with ODAS, the French armaments agency that is handling the contract on the French side.
ODAS struggling to hold on
However the new balance of power in Riyadh has come along at a time when ODAS has been sidelined in Saudi Arabia. Saudi Authorities has recently announced to the French agency that the credit line of the AMWAJ programme, which is financing the costly modernization of the Saudi fleet, will close in January 2018, immediately closing off a major part of ODAS’ financial resources. At the same time, French companies are being actively encouraged by the Saudi authorities to sign deals directly with the new backbone of the defence industry in the kingdom, Saudi Arabia Military Industries (SAMI, see here). ODAS, which drew the ire of Mohammed bin Salman in 2015 will somehow have to find a role for itself in the new landscape, along with its traditional agents such as Mohammed Al Zeer.
Now that the cards have been reshuffled in Saudi Arabia some French defence groups find themselves at a disadvantage through the contractual relationships they have with their former agents. This is the case for Safran, which is still trying to get out of its deal with Somo Al Mamlaka, the company headed by Turki Al Sudairi and chaired by Abdallah Al Shugeir, who is close to Khalid bin Abdulrahman Al Essa, the chief of staff of King Salman bin Abdulaziz. The contract is still active even though there is not the slightest whiff of business in the air for the aeronautical company .
National Guard still operational… for the moment
Corsican businessman Georges Francioli‘s Caesar International, the last Franco-Saudi channel that is still functioning properly, remains the go-to outfit for companies wishing to obtain contracts with the Saudi Arabian National Guard (SANG), which is commanded by Mutaib bin Abdullah, the son of the former king, via the family of Salah Fustok (see here). Orders have continued to be placed, due to the fact the SANG is currently deployed in the war in Yemen. However rumours have been circulating in Riyadh recently that the National Guard may lose its autonomy and become a part of the army. This would mean an end to Mutaib’s involvement in procurement.