U.S. DOUBTS SAUDI ABILITY TO PAY FOR NEW JETS

WASHINGTON [MENL] -- The United States continues to doubt whether Saudi
Arabia can sustain a major military aircraft procurement project.

Saudi Arabia, despite increased revenues from oil in 2003, might not have
enough funds or political will to sustain a multi-billion deal for new
fighter-jets, government sources said. They said a review by the Defense
Department has warned that Riyad could cancel any major aircraft deal and
refuse to pay U.S. suppliers.

"The Saudis would like new aircraft but there is clearly a problem of
funding and political will," a Pentagon source said. "The Saudis have been
known to stop paying suppliers in mid-stream because they've changed their
minds. Such a prospect appears more likely than ever."

The Pentagon review comes amid planned defense cooperation talks between
Riyad and Washington that could pave the way for billions of dollars in new
arms sales to the Saudi kingdom. Already, Riyad has requested that the
United States modernize the National Guard in a project that could be exceed
$900 million. The National Guard is under the direct command of Crown Prince
Abdullah Bin Abdul Aziz.
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