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Timeline shows how Israel squeezed German subsidy on ship deal

January 31, 2017 (Photo Credit: Guido Bergmann/Bundesregierung via Getty Images)
TEL AVIV — An official Israeli government timeline of milestones leading up to an estimated €500 million (US $539.51 million) naval contract with Germany shows how Israel used the specter of an international bid to squeeze 27.5 percent off the price of four corvette-class surface ships, now under construction at the ThyssenKrupp Marine Systems Shipyard (TKMS) in Kiel.

The timeline, recorded by the Israeli National Security Council and published Sunday by the office of Prime Minister Benjamin Netanyahu, aimed to counter growing accusations of possible conflicts of interest between the Israeli premier and his personal attorney, who also happens to represent the authorized TKMS agent in Israel.

While it remains to be seen whether the timeline will buttress Netanyahu’s public standing amid multiple police investigations into alleged conflicts of interest, it sheds light on Israel’s hardball negotiating tactics with one of its staunchest allies.

It shows how in less than four months — from early May to late August of 2014 — Israel managed to extract from German Chancellor Angela Merkel a €175 million subsidy that she was not initially prepared to give. It shows how Israel used an international bid as a stalking horse to prompt Merkel’s change of heart; a bid that was suddenly frozen and quickly revoked, leaving at least two South Korean shipyards in the lurch.

Israel ultimately contracted with TKMS in 2015 for four, 2000-ton Sa'ar-6 ships loosely based on the Blohm+Voss-class 130 corvettes. They are intended for defending offshore energy assets and will be equipped with Israeli-developed sensors and combat gear, including the Barak-8  air defense system and Iron Dome interceptors.

Navy officers here say keel laying on the first ship is planned for this summer, with delivery by early 2020. The remaining three ships should be delivered into Israeli hands by the end of 2021 or early 2022.

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