Twelve new Rafale to Egypt

[The SC]

According to our information, Foreign Minister Jean-Yves Le Drian has brought the new French proposal to Egyptian President Abdel Fattah al-Sissi.

According to concordant sources, Bercy no longer blocks the continuation of negotiations on a new twelve Rafale contract in Egypt. Cairo asked Paris for payment facilities in the image of the previous contracts signed between Cairo and the manufacturers of French armaments. "It was not conceivable for Egypt that France changes the terms of payment," says one at the Tribune.

During the visit of three days by Egyptian President Abdel Fattah al-Sissi to Paris in October, Emmanuel Macron explained to his host that he wanted to continue the relationship of trust between Egypt and France, notably in the framework of strategic partnership between the two countries relaunched in 2015. That's what the Egyptian president was looking for in Paris. For two years, Egypt has launched the modernization of its armed forces with the support of France. Paris is committed to providing new equipment, particularly to the Air Force (24 Rafale, a military telecom satellite) and the Navy (four Gowind corvettes, one FREMM, two BPCs). This represented nearly seven billion euros (6.83 billion) contracts for the French arms industry between 2014 and 2016.

A contract on track

As a result, the Élysée asked Bercy to stop blocking the negotiations to sell the Dassault Aviation fighter. According to our information, it was Foreign Minister Jean-Yves Le Drian who brought the new French proposal to Sissi in Sharm el-Sheikh, where a youth forum was being held. The two men maintain very good relations of trust.

The release of payment facilities by the Ministry of Finance is not synonymous with a contract signed tomorrow. Negotiations can resume in a calm atmosphere. Sources interviewed by La Tribune estimated that there was, however, a good chance of success for the signing of a contract in a few weeks.

Egypt gas producer

The Rafale was no exception. Bercy blocked all contracts on Egypt whether military or civil. Why? It is a problem of outstanding on this country. With the important contracts recently signed between the two countries, the envelope allocated by Bercy to Bpifrance (formerly COFACE) on this country is fully used, had it been specified at La Tribune. And Bercy did not want to add an envelope estimating that the country risk could deteriorate. However, according to a source interviewed by La Tribune, there was no default of payment from Egypt.

If Emmanuel Macron has resolved the point of friction between the two countries, it is because he had guarantees. Egypt is expected to grow by 6% annually this year. Cairo has money to pay the bills. In particular, Egypt will be able to rely on gas production in the Mediterranean from the end of this year. In 2015, the Italian energy company ENI discovered on behalf of Egypt a huge offshore gas field in its territorial waters off Port Said (Zohr deposit). Enough to satisfy domestic demand for several decades, to return to the export and thus to benefit from new foreign exchange earnings.

http://www.latribune.fr/entreprises...y-ne-bloque-plus-les-negociations-758088.html

 

[Gomig-21]

We were hoping for 4 squadrons in the end but we'll take the 3 total for now. The issue was never really whether Egypt could afford to pay for these fine jets, lol, it had to do with how much Egypt was going to pay for these jets. It's always how much of the bottom line is the manufacturer going to make out of the sale, which you can't blame France one bit. Look at the sweet deal Egypt got for the previous contract worth $6.8 billion;

1)
- 24 Rafale,
- 500 MICA IRs & ERs
- 2 simulators
- spare parts
- logistical and maintenance support
- pilot training & crew/technician training
- other misc. items associated

2) Military Telecom Satellite
3) 4 Gowind Corvettes
4) 1 FREMM
5) 2 Mistrals helicopter carriers & LHDs

It doesn't get any sweeter than that and the French were looking to get a better deal for themselves and I don't blame them, but it had nothing to do with affordability because Egypt would've never asked for 12 of them, let alone 24 if it couldn't afford them. It just wanted to buy them at a comparable price to the original contract but it looks like they settled for something in between so the order fell to 12.

Hopefully we'll see the Talios pod and the Meteor with this order.

 

[The SC]

We were hoping for 4 squadrons in the end but we'll take the 3 total for now. The issue was never really whether Egypt could afford to pay for these fine jets, lol, it had to do with how much Egypt was going to pay for these jets. It's always how much of the bottom line is the manufacturer going to make out of the sale, which you can't blame France one bit. Look at the sweet deal Egypt got for the previous contract worth $6.8 billion;

1)
- 24 Rafale,
- 500 MICA IRs & ERs
- 2 simulators
- spare parts
- logistical and maintenance support
- pilot training & crew/technician training
- other misc. items associated

2) Military Telecom Satellite
3) 4 Gowind Corvettes
4) 1 FREMM
5) 2 Mistrals helicopter carriers & LHDs

It doesn't get any sweeter than that and the French were looking to get a better deal for themselves and I don't blame them, but it had nothing to do with affordability because Egypt would've never asked for 12 of them, let alone 24 if it couldn't afford them. It just wanted to buy them at a comparable price to the original contract but it looks like they settled for something in between so the order fell to 12.

Hopefully we'll see the Talios pod and the Meteor with this order.

Yes the contract was sweet enough, but the option of 12 more Rafale was part of it..(maybe written in very small characters underneath)..The French "attempted" _otherwise how can anyone justify their Financial demands, when Egypt didn't default at all_ to change the clauset to their advantage.. but Sissi was adamant that it should be done as it was specified in the first contract..at the end they gave in.. forced by the Elysee to be fair..

Talios along Meteor are both coming to Egypt..it was said in many credible and official articles.. hopefully with this order..

 

[Gomig-21]

Yes the contract was sweet enough, but the option of 12 more Rafale was part of it..

That's why they call it an "option." It's like in sports contracts, like Mario Lemiux (to use a Canadian ) when he played for the Pittsburgh Penguins and they offered him a contract for 5 years at $10 million a year with an option for a 6th and 7th for $12 mill and $14 mill respectively. He holds the option not them and when the time comes, he can either take the option or go to another team for more money, right? But the important part is he holds the option and the salary was already set 5 years prior. It's the same principle here where Egypt held the option and the cost was all set (which would be interesting to know if it was at the same rate of the first 24 Rafales or higher?) And so they have to honor it if it's offered, agreed upon and signed and as you said, of course there was no default (and I love all the haters who came out and screamed poverty and Egypt defaulted yada yada yada lol) since they would've never bought the first 24 or came close to exercising the option for the additional 12 if they thought they had any issue affording them. So Les Francois had no choice but to honor the option.

The French "attempted" _otherwise how can anyone justify their Financial demands, when Egypt didn't default at all_ to change the clauset to their advantage..

I wonder if they were trying to negotiate the additional 12 on top of the option and they couldn't come to an agreement on that and just settled for just the first 12? This tells me that any further Rafales will be $300+ million each from here on, especially if the EAF is interested in the F4. Oooof.

but Sissi was adamant that it should be done as it was specified in the first contract..at the end they gave in.. forced by the Elysee to be fair..

Good for him. A deal is a deal, gotta honor it. My only fear is this might be the end of Rafale purchases by the EAF. Their cost beyond this order will be unquestionably prohibitive, especially with the additional, larger Indian order and maybe UAE etc.

Talios along Meteor are both coming to Egypt..it was said in many credible and official articles.. hopefully with this order..

They should push for the Meteor no question AND the MICA NG. And can you imagine if that does happen, the EAF goes from the worst BVR equipped AF with nothing but the old and limited AIM-7 Sparrow to one equipped with the best BVR A2A missiles? Crazy.

 

[The SC]

That's why they call it an "option." It's like in sports contracts, like Mario Lemiux (to use a Canadian ) when he played for the Pittsburgh Penguins and they offered him a contract for 5 years at $10 million a year with an option for a 6th and 7th for $12 mill and $14 mill respectively. He holds the option not them and when the time comes, he can either take the option or go to another team for more money, right? But the important part is he holds the option and the salary was already set 5 years prior. It's the same principle here where Egypt held the option and the cost was all set (which would be interesting to know if it was at the same rate of the first 24 Rafales or higher?) And so they have to honor it if it's offered, agreed upon and signed and as you said, of course there was no default (and I love all the haters who came out and screamed poverty and Egypt defaulted yada yada yada lol) since they would've never bought the first 24 or came close to exercising the option for the additional 12 if they thought they had any issue affording them. So Les Francois had no choice but to honor the option.

You got it!

I wonder if they were trying to negotiate the additional 12 on top of the option and they couldn't come to an agreement on that and just settled for just the first 12? This tells me that any further Rafales will be $300+ million each from here on, especially if the EAF is interested in the F4. Oooof.

Sissi tried to squeeze another 12 for the same price, since he knows that after this deal the price will go much higher!

Good for him. A deal is a deal, gotta honor it. My only fear is this might be the end of Rafale purchases by the EAF. Their cost beyond this order will be unquestionably prohibitive, especially with the additional, larger Indian order and maybe UAE etc.

Logically the cost should get lower, if the demand is higher and the production is increased.. just like the F-35 _ but that took a presidential intervention_ That is how greedy these companies are!

They should push for the Meteor no question AND the MICA NG. And can you imagine if that does happen, the EAF goes from the worst BVR equipped AF with nothing but the old and limited AIM-7 Sparrow to one equipped with the best BVR A2A missiles? Crazy.

I think that is already done, according to many reliable sources..
Paise Allah for that..