256. Telegram From the Embassy in Saudi Arabia to the Department of State1
338. MODA Prince Sultan summoned me, together with Acting Deputy Foreign Minister Mas’ud, to Ministry of Defense Office in Jidda [Page 489] November 1. (HMG Aviation representatives saw Sultan five hours later.) Purpose of meeting was discussion Secretary Defense McNamara’s letter to Sultan2 received Jidda October 29. Sultan said he gratified by letter and welcomed its “spirit.” He then asked we go over letter together paragraph by paragraph.
After completing paragraphs one through four, he went into long dissertation re USG-SAG relationship. Recalling his five-hour conversation with Ambassador Hart earlier in year, he emphasized importance SAG regime be enabled demonstrate that SAG’s primary reliance on USG sound and productive. He referred to MTM relationship with SAG and noted that other Arab countries had questioned benefits derived from USG-SAG military relationship. He cited fact SAG pays most of costs of MTM, excluding salaries USG advisors. He commented that recent visit to Jordan had impressed him with fact USG financing purchase all Jordanian military equipment which, he contended, Jordanian people fully recognize and appreciate. Sultan continued that in Saudi Arabia there are elements both in military as well as in Council of Ministers who are unfriendly to U.S. What SAG needs and wants is tangible evidence USG desire be helpful Saudi Arabia in order to help validate in eyes of public SAG determination continue its close relationship with USG. (What Sultan appeared be driving at was that USG should pick up portion of defense package tab.)
Addressing specifics of letter, Sultan said he taken aback by [$]600 million figure cited as maximum possible cost of defense package. He claimed that few months before arrival USG Air Defense Review Team Lockheed had quoted figure of some $200 million as cost of package exclusive Hawk missiles. Adding estimated cost of Hawk missiles as provided by review team plus additional amount for unforeseen items, SAG had come up with total of $330 to 340 million. This had been figure presented to King and on basis of which he had authorized Sultan proceed with negotiation defense package.
I indicated my understanding that cost of labor in U.S. had risen since initial quotations and that considerable portion of 600 million figure included estimate of cost of simultaneous construction of all facilities. If construction phased, costs would be less. Lockheed had also indicated it might be prepared to adjust this figure downward now that it had had an opportunity to undertake further on-site survey. I emphasized fact only way Lockheed could hire and keep top flight technicians on job in Saudi Arabia was by providing them with housing equivalent to US standards as well as accustomed recreational facilities. I said further that once Lockheed had had opportunity cost out each [Page 490] item, Sultan would probably find that cost of hardware, including aircraft, not unreasonable. In any case we would urge Lockheed reduce its prices as much as possible.
With regard to Sultan’s oblique suggestion that USG finance portion of air defense package, I noted extreme difficulty Executive branch USG having these days in obtaining Congressional support for additional—let alone existing—military and economic aid programs. Re generous credit terms, I expressed view Secretary Defense letter showed that USG making extraordinary effort to satisfy SAG request. I said that while true SAG not receiving USG grant assistance, His Highness might wish to remind “unfriendly elements” in Saudi Arabia of fact USG provides most important assistance of all, namely, clear, public undertaking to support and preserve integrity of Saudi Arabia. Sultan did not pursue point further.
Sultan then asked whether would be useful invite into our meeting Lockheed representatives who waiting outside his office. Since latter had just completed round of discussions with RSAF committee resulting in agreement Lockheed would work up price lists on basis two alternative time-phased programs, I suggested any further discussion of details await Lockheed’s completion its financial estimates. Sultan indicated this agreeable and asked that USG official be present during next round of discussions. He said he had spent most of night discussing two alternative Lockheed proposals. He tentatively favored second proposal which would phase in program over 4-5 year period since he said he recognized need first train Saudi personnel adequately. Meanwhile, he asked his military staff to draw up third alternative time-phased program.
I noted Lockheed had indicated would take two weeks complete financial estimates. When Sultan commented this too long, I offered undertake urge Lockheed complete estimates in one week and to assure that USG official either from Washington or from Country Team would be present during next round. Sultan expressed desire that highest priority be attached to installation of Hawk missiles.
Finally, Sultan asked that I convey to Mr. McNamara on King’s and his behalf two points: (1) their gratification with SecDefense’s latest letter and (2) their desire to continue maintain special relationship with USG and their belief that forthcoming USG response in implementing defense package would reflect reciprocal USG desire.
Meyers of Lockheed briefed re portions of foregoing including 1) request financial estimates be prepared in week instead of two weeks; 2) SAG concern re high prices and our hope Lockheed can reduce; 3) Sultan desire USG official attend next round of discussions.
I have been in close consultation with CHUSMTM, who now in Jidda and endorses foregoing.
[Page 491]Comment: Hope that DOD can persuade Lockheed complete its financial estimates in less than two weeks and arrange have representatives in Saudi Arabia prepared discuss and cost any alternative time-phasing proposed by Saudis. Welcome suggestions as to who from USG side might attend next round Lockheed-MODA-RSAF discussions.
- Source: National Archives and Records Administration, RG 59, Central Files 1964-66, DEF 12-5 SAUD. Secret; Limdis. Repeated to CINCSTRIKE/CINCMEAFSA, London, Paris for DAUSRO, Dhahran, CHUSMTM Dhahran, Amman, and Beirut.↩
- See footnote 5, Document 255.↩