Paris: France's top defence suppliers, including French electronics group Thales, are no longer in advanced talks over a 7-billion euro border surveillance ($8.83 billion) contract with Saudi Arabia, La Tribune reported yesterday.

The French paper said Saudi Arabia has decided to launch an international tender for the project, which has been the subject of on-off negotiations for about 15 years.

La Tribune said French companies would now have to compete against bidders including Italy's Finmeccanica, US defence company Raytheon Co., European aerospace group EADS and Britain's defence group BAE Systems Plc.

No one at Thales was not immediately available for comment.

EADS front-runner

The project was on the agenda for talks between French President Jacques Chirac and Saudi Arabia's King Abdullah Bin Abdul Aziz in March.

During Chirac's visit in Riyadh then, Thales Chief Executive Denis Ranque had said he was confident that the French company would be selected as a supplier.

Meanwhile, the European aerospace giant EADS said yesterday that it planned to bid in Saudi Arabia's tender for the border security radar system.

"We are well placed" to win the tender for the system, known as Miksa, an EADS executive said. The sale of the Miksa acronym for Ministry of Interior Kingdom of Saudi Arabia would also include a telecommunications network, reconnaissance aircraft and about 20 helicopters.

The contract would run for 12 years, and involves 225 radar installations.

Shares in the company fell 0.41 per cent to 33.64 euros in morning deals on the Paris stock exchange after the report in La Tribune.A decision is expected during 2006.

French President Jacques Chirac during his visit to Saudi Arabia had hoped to clinch the defence deal.

"Saudi Arabia is actively pursuing a detailed study of different solutions" proposed to Riyadh in terms of cooperation in defence and security, Chirac had told a news conference.

"All this is taking place in an excellent climate," he said.

At stake were the sale of French Rafale fighters and the border monitoring system to Saudi Arabia, which a French presidential spokesman had cautioned would not be finalised during the trip, Chirac's fourth to the country.

French aerospace group Dassault Aviation confirmed last April that talks had taken place on the purchase of the Rafale.

The French daily Les Echos said at the time the discussions focused on the purchase of 48 fighters with an option for 48 more in a deal valued at six billion euros ($7.2 billion ).

Chirac, whose visit to Saudi Arabia came two months after it was announced that Saudi Arabia would buy Typhoon Eurofighter jets from Britain, had said he was pleased by the contacts established between French businessmen and industrialists accompanying him and Saudi counterparts.

France had hoped to clinch the Miksa as well as the Rafale fighter deals during President Jacques Chirac's visit to Saudi Arabia in March. But with the Saudis now going for international tender it looks remote that the deal will stay with the French firm.