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Turkey, Germany Jointly Seek Sub Sale to Indonesia

Aug. 30, 2011 - 03:45AM   |  
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ANKARA - A team of Turkish and German companies and Turkey's arms procurement office are seeking to sell two HDW 209-type diesel submarines to Indonesia, worth about $1 billion, in a competition against South Korean rivals, a senior Turkish procurement official said.

In a tender opened by the Indonesian Navy earlier this year, French and Russian offers fell off and South Korea's Daewoo Shipbuilding and Marine emerged as the leading candidate. Daewoo was expected to bid together with Germany's Howaldtswerke-Deutsche Werft (HDW), but later decided to compete on its own.

HDW, a subsidiary of ThyssenKrupp Marine Systems, faced the threat of being left out of the deal. It approached the Undersecretariat for Defense Industries (SSM), Turkey's defense procurement agency, to seek the Indonesian contract jointly, the procurement official said.

This came just as President Abdullah Gul paid an official visit to Indonesia in April, when the two countries signed a comprehensive defense industry cooperation agreement. Both are Muslim nations that share close political and cultural ties, and they are developing their industrial relations.

HDW also is co-manufacturing with Turkey six modern U 214-type diesel submarines for the Turkish Navy. Turkey earlier built with HDW a set of 14 U 209-type subs.

HDW in June sent a letter to SSM, confirming that "SSM is entitled to market and sell HDW-class U 209 1,400-ton submarines to be built in Turkey for the Project of Procurement of Diesel Electric Submarines by the Indonesian Navy."

Then came SSM's sweeteners. In a letter sent to Adm. Soeparno, SSM chief Murad Bayar said that "our offer includes one or two 209-class submarines leased to the Indonesian Navy as a 'gap-filler' solution until your submarines have been built."

Bayar also pledged maximum work share for Indonesian defense companies, including national shipyard PT-PAL, emphasizing HDW's full support for the Turkish bid.

"As a well-known worldwide brand and proven technology, 209-class submarines shall increase your country's industrial capabilities and will bring us a chance to share our knowledge to provide regional peace and stability," Bayar said.

Next, in a letter to Indonesian President Susilo Bambang Yudhoyono in late July, Gul confirmed and reiterated Turkey's sweeteners and called for increased defense industry cooperation.

But Daewoo Shipbuilding's CEO said Aug. 28 that he expected Indonesia to name his company as the preferred bidder.

"We expect the deal will be signed within this year once the Indonesian government earmarks the budget," Nam-Sang Tae said, according to news reports.

If the Turkish bid is preferred, the two class-209 submarines will be built at Turkey's Golcuk naval shipyard by the Turkish company STM under the license of HDW.

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