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Israel Eyes S. Korean OPVs for EEZ-Defense

Purchase Could Spur Reciprocal Trade Deal

Jan. 14, 2013 - 08:05AM   |  
By BARBARA OPALL-ROME   |   Comments
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TEL AVIV — Israel is planning to buy four offshore patrol vessels (OPVs), most likely from South Korea, to defend drilling platforms, pipelines and other strategic assets in its exclusive economic zone (EEZ).

The estimated $400 million procurement, government and industry sources here said, serves parallel Defense Ministry aims: providing proven, low-cost surface ships for the Navy’s new mission of EEZ defense and expanding opportunities for a two-way trade deal with Seoul.

The Israeli government granted the Navy operational responsibility for the new EEZ defense mission late last year but has yet to deliver the approved multiyear funding needed to initiate a formal procurement process. Nevertheless, sources here said talks are progressing with Hyundai Heavy Industries and Daewoo Shipbuilding & Marine Engineering on the four-ship package.

Israeli MoD and Navy procurement chiefs met with both shipyards last month to discuss design, price and delivery issues, with talks focused solely on a hull, mechanical and electrical program for hosting Israeli-made subsystems.

Navy requirements call for the OPVs to weigh 1,200 to 1,400 tons, sail at a top speed of 24 knots and remain at sea without refueling for more than a week.

Each ship would be fitted to accommodate one helicopter for search, rescue and evacuation missions and a suite of Israeli-developed combat systems, including radar, electronic warfare, command and control, and self-defense capabilities.

“We’re talking about four relatively inexpensive ships for presence and deterrence, with the capability to act when needed against detected threats,” an Israel Navy officer said.

At a conference here last month on challenges associated with Israel’s offshore energy assets, Rear Adm. Yaron Levy, chief of the Navy staff, said the new ships were an essential part of a new operational concept for persistent operations in an area five times greater than the 12-nautical-mile sovereign waters.

Sources here cited several factors driving MoD’s preference for South Korean over U.S. ships — Israel’s traditional source for U.S.-funded big-ticket purchases — or over ships from Germany, its longtime partner on the Navy’s Dolphin-class submarines.

First, MoD expects funding for the EEZ-defense ships to come from the Treasury rather than its own shekel-based defense budget or annual U.S. military aid, which, with very few exceptions, is conditioned on U.S.-made purchases.

While Germany in the past has supplemented Israel’s shekel-based budget for procurement of German-built ships, Chancellor Angela Merkel informed Israeli Prime Minister Benjamin Netanyahu in 2010 that her government would not underwrite a new surface ship package.

As for U.S. shipyards, sources said high labor rates render U.S. alternatives prohibitively expensive for a program not funded with aid from Washington. Labor costs are relatively low in South Korea, sources said, particularly in the case of Hyundai, the world’s largest shipyard.

MoD also wants to repair ties frayed by its February 2012 choice of the Italian M-346 trainer aircraft over Korean Aerospace Industries’ T-50. South Korean defense officials had criticized MoD’s management of a $1.3 billion competition in which the winner was selected without a formal request for proposal.

Finally, MoD’s SIBAT Defense Cooperation and Defense Export Authority has designated South Korea as a key market for selling Israeli products, including UAVs, radars and active defense intercepting systems.

MoD Director-General Udi Shani is leading efforts to interest Seoul in a reciprocal trade deal in which Israel’s purchase of South Korean ships triggers new orders for local firms.

“That’s our goal, and we proved it can be done,” a senior MoD official said, citing last year’s conclusion of a multibillion-dollar package for Italian-built trainers in exchange for an Israeli satellite and early warning aircraft.

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