Saab made to wait as Brazil delays fighter deal

Brazil has announced that it will delay a decision to buy 36 fighter jets following a slew of budget cuts, leaving Swedish firm Saab, along with French and US rival bids, playing the waiting game over the lucrative deal.

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Major Brazilian daily O Estado de Sao Paulo cited four unnamed government ministers as saying new President Dilma Rousseff saw no "climate" for the acquisition in 2011, and that such a move in the midst of a $30-billion slash in the year's budget would be an "inconsistency."

France, Sweden and the United States are vying for the contract, which has an initial value estimated at $4 billion to $7 billion, with the possibility of many more aircraft in the future as the Brazilian Air Force seeks to revamp its fleet of fighters.

Rousseff had met for over three hours with Defense Minister Nelson Jobim on Tuesday to discuss the budget restrictions, and while Jobim told reporters that the pending deal would not be impacted by the cuts he also said there were "no budget expenditures this year" for the fighter contract.

Jobim had also stressed the military would take its time to choose the best bid and begin complex negotiations on technical matters and the terms of the deal, but said he expected a decision this year.

Sources in the president's office and the defense ministry told AFP that the purchase process was ongoing.

The intense competition for the contract has dragged on for years, with Rousseff inheriting the purchase decision from her predecessor Luiz Inacio Lula da Silva.

The shortlist for the jets is made up of the French-made Rafale, Sweden's Gripen NG and the US F-18 Super Hornet, and speculation has swirled about which bid is in favour.

Lula had declared a preference for French planes but ultimately left the decision to Rousseff, who has not shown any favoritism during her first 45 days in office.

Brazil insists on the unrestricted transfer of technology as part of the deal, as it intends to use the vast project to develop its aviation industry and become a regional provider.

In January the French defense minister said his country was confident of scooping the contract. Earlier this week the Pentagon assured that Brazil would get a "significant transfer of technology" by buying US fighter planes from Boeing.