EADS near $1 bln Saudi-Iraq border deal-executives

By John Irish

DUBAI, June 24 (Reuters) - A consortium led by European aerospace group EADS (EAD.PA: Quote, Profile, Research) is favourite to win a $1 billion contract to build a border fence shielding Saudi Arabia from Iraq, executives at the Saudi business partner said.

Saudi Arabia, the world's largest oil exporter, wants to build a razor-wire fence along the 900-km (560 mile) frontier with its northern neighbour, with thermal imaging and radar equipment.

An official at Al-Rashed Trading & Contracting, who declined to be identified, told Reuters the Saudi group had received a letter of intent for the work and was "working and completing some requirements for the client". The two companies comprise the consortium.

Moubarak al Majid, general manager for construction at Al-Rashed said the company was still negotiating. "No contract is signed," he told Reuters from Riyadh. "Call back in two weeks."

Officials at Saudi Arabia's Ministry of Interior could not immediately be reached for comment. Jacques Bourgeois, general delegate for EADS in Saudi Arabia was not available when contacted.

Two contractors bidding for the project told Reuters in September the project would cost about 4 billion riyals ($1.07 billion) and was part of a wider defence plan to secure the country's 6,500 km (4,000 miles) borders.

International defence companies, including Thales TCPF.PA, U.S-based Raytheon Co (RTN.N: Quote, Profile, Research) and DRS Technologies DRS.N also bid for the project, according to a list of bidders obtained by Reuters and confirmed by industry sources at the time.

Interior Minister Prince Nayef has said the border fence is essential because of escalating violence in Iraq, sectarian fighting and an insurgency against the U.S.-backed government in Baghdad.