93. Telegram From the Embassy in Saudi Arabia to the Department of State1

4065. DOD for ISA. For ASD Ambassador Hill from James Noyes. Subject: Discussions on Saudi Naval Expansion Program (SNEP) September 16–19. Ref: Jidda 3614.

Summary: Noyes team accompanied by Ambassador Thacher made first presentation of latest US proposals for RSNF development to MODA Prince Sultan September 17. US officials stressed that latest proposals would provide SAG with a navy more modern and more [Page 338] effective than that earlier proposed, and within financial guidelines laid down by Prince. In reply, Sultan took up most of the meeting reviewing grievances at what he regarded as shortcomings of US planning support for RSNF; he directed that technical discussions proceed between US and Saudi naval officials, and that entire team meet again with him September 19. Technical discussions achieved relatively little progress due to Commander RSNF lack of naval expertise. At meeting September 19, however, Sultan listened with interest to further outline of US proposals and directed that these be compared to earlier plan and any differences explained and accounted for. He refused to be drawn into discussions of specific points raised by Commander Saja and urged that study be completed as soon as possible for his consideration. He agreed to proposal that RSNF team travel ASAP to Washington. Sultan stressed his desire move quickly in finalizing Saudi naval expansion program and willingness to meet with team, even during Ramadan. Embassy and Noyes team encouraged that Sultan seems ready to listen to further explanations based upon our professional assessment of latest technological developments and RSNF’s needs. End summary.

1. DOD team of Deputy Assistant Secretary Noyes, Rear Admiral Gerhard, Captain Coleman and Mr. Hoenig, spent much of September 15 in discussion and review of DOD’s SNEP presentation with Ambassador Thacher and EmbOfficers. On September 17, Ambassador Thacher, accompanied by DOD party, made initial presentation to MODA Prince Sultan.

2. Presentation acknowledged that 596 million dollar figure had only been rough estimate and that is preparation had not sufficiently considered extremely recent developments in weapons and technology or considerable impact such developments on cost of navy proposal. Ambassador and team stressed, however, that latest 19-ship package contains most modern weapons, engines, and ship design in the world, and would yield navy possessed of better fire power and even more military effectiveness than under earlier proposals. Cost estimates of latest package, moreover, will be considerably more precise than before. Nothing in latest plan precluded expansion of RSNF shore installations or ship strength if subsequently desired. Offer of lease to Royal Saudi Navy of two USN patrol ships as interim measure made per Deputy Secretary’s September 10 letter.

3. Sultan responded by vehemently reiterating grievances and complaints contained in his letter of August 18 (Jidda’s 3537). In highly rhetorical style he outlined difficulties he had faced in obtaining Council of Ministers’ approval to 596 million dollar naval package; if US negotiators insisted on naval estimates in range of 841 million dollars, he might have no choice but to abdicate personal responsibility for [Page 339] naval matters. DOD reps could then negotiate directly with higher levels of SAG, or Saudi Arabia might simply have to content itself with a coast guard. Sultan willing, however, to accept some cost adjustments—not to exceed ten percent, or total of 660 million dollars—if shore facilities and installations not put back and if other aspects of former plan are adhered to. Ambassador in reply pointed out that latest US proposals were indeed different from earlier SNEP package, but that end product likely to be even more effective. Sultan continued to emphasize that final naval package should highlight usefulness, effectiveness and modernity of equipment and shore installations. SAG demanded maximum responsiveness from USG within budgetary framework of his latest position (595 million dollars plus ten percent). Saudis seemed interested in DepSec’s proposal per Sept 10 letter, but no final action taken.

4. At Sultan’s direction September 17 and 18 devoted to technical discussions between Noyes team and reps on Saudi Navy, headed by Commander Saja. Commander clearly lacked technical and linguistic skills to comprehend nature of US proposals. With regard to propulsion units, he continued to favor German diesel “Maybach” engines, despite convincing presentations re merits of gas turbine. He also attached great importance to acquisition of flagship, and undiminished shore facilities.

5. Noyes team returned Jidda evening September 18, and in company of Chargé Horan called upon Prince Sultan September 19. Chargé began presentation by stating that US team felt progress had been achieved in course of frank and forthcoming discussions in Riyadh; USG proposals we believed incorporated most modern and effective concepts of naval weapons, design, and organization. We were confident that after further review with officials of RSNF, final proposals could be drawn up responsive to SAG’s needs and His Royal Highness’ directives. Chargé added that Mr. Noyes had prepared letter that he wished to leave with HRH and that outlined main points and advantages of US proposal.

6. Sultan listened carefully to reading of letter and announced that he found its contents most satisfactory. As basis for his further review, he then directed that schedule of comparisons be prepared making clear differences between former US proposal and terms of latest one. Differences should be noted, and careful explanation provided as to why latest formulation required, and why it advantageous for RSNF. Shore installations continued to have importance; above all Sultan would never accept any changes that might diminish military capabilities of RSNF.

7. Mr. Noyes assured Prince that review of SNEP caused by price increases would actually result in increasing the modernity and striking power of Saudi Navy. A number of technical points, however, such [Page 340] as precise costing of weapons and relative merits of turbine/diesel propulsion units required further discussion. This could perhaps best be done with RSNF representatives in Washington. Time was important to US side, moreover, since LOA’s due to expire Nov. 30, 1973. Accordingly, Mr. Noyes urged Sultan to despatch team of RSNF officers to Washington ASAP.

8. At this point RSNF Commander Saja interjected complaint that latest US proposals had omitted flagship; Commander believed flagship important because of its relatively greater operating range and depth of radar coverage it could provide for smaller RSNF craft. Saja professed to be unconvinced by US team’s claims of operating radius for PG’s. To this Mr. Noyes replied that flagship not omitted from US plan, but that its acquisition merely postponed until future date. As to radar, this another technical question that two sides could review in Washington.

9. Sultan refused to address himself to points raised by Commander Saja. He stated that he had no objections to RSNF team of Commander Saja, Commander Rashad and one other officer proceeding immediately to US for further discussions. Sultan’s Office Director called in and ordered to make immediate arrangements for such travel through COS. Sultan then stated that he wished all aspects of US proposals to be studied carefully and objectively; when study was complete, DOD team should return with report specifying areas of agreement or disagreement. Sultan shared Mr. Noyes’ concern that SNEP review be completed promptly. Prince willing to meet again with team any time, even during Ramadan, so long as this did not involve High Holy Days (approximately October 23–30). Finally, he asked Saja for report on discussions to date with US team so that info could be provided to King Faisal.

10. Prior to departure of Rear Admiral Gerhard September 20, additional background material left with RSNF consisting of (a) cost escalation slides, (b) summary description of new US naval development proposals, (c) program milestones if RSNF accepts Deputy Secretary’s offer to lease two PGs.

11. Comment: Sultan ready to listen to further US explanations based upon our professional assessment of latest technological developments and RSNF’s needs. We encouraged by practical and realistic tone of his remarks in latest meeting. Prince seems determined to keep his options open and not to allow his subordinates to paint him into a corner. Some hard bargaining probably still lies ahead and a special effort will have to be made in Washington to wean Commander Saja from certain positions he stubbornly adhering to out of pride and naval inexperience.

  1. Summary: The Embassy reported on meetings between James Noyes, Deputy Assistant Secretary of Defense for International Security Affairs, and Prince Sultan regarding increased costs for SNEP.

    Source: National Archives, RG 59, Central Foreign Policy File, [no film number]. Secret; Immediate. Also sent to the Department of Defense. Repeated Immediate to CNO, USCINCEUR, and CHUSMTM. Telegram 3614 from Jidda, August 22, is ibid. Defense Attaché Lt. Col. William Fifer previously informed the Department of Defense of Saudi concerns about increased costs in telegram 288 from Jidda, August 26. (Washington National Records Center, OASD Files: FRC 330–78–0002, Saudi Arabia 092 (15 November 1973)) Sultan announced the budgeting of $850 million for SNEP on March 15, 1974, according to telegram 1318 from Jidda, March 18. (National Archives, RG 59, Central Foreign Policy File, [no film number]) For material on SNEP, see Foreign Relations, 1969–1976, vol. XXIV, Middle East Region and Arabian Peninsula, 1969–1972; Jordan, September 1970, Documents 131 and 138.