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Reprinted with permission from AMI HOT NEWS; an internet publication of AMI International, PO Box 40,
Bremerton, Washington, 98337.

From the January 20 /0 Issue
NORWAY – Future Submarine Decision in 2011
In mid-January 2010, AMI received information regarding the possible collaboration between Norway and Sweden for the acquisition of the next generation of submarines for the Royal Norwegian Navy (RNoN).

Admiral Arne Roksund, head of the working group within the RNoN that will ultimately decide the fate of the Norwegian Submarine Force, stated in December 2009 that the navy has three options with regards to its subsurface fleet. Those are to “replace, refurbish or discontinue the submarine fleet.” Although a modernization plan is already in place to upgrade the sonar systems on board the six units of the Ula class by 2012, it is clear that the current Submarine Force will be obsolete and require replacement by the end of this decade. Considering Norway has no indigenous submarine building capability, the RNoN is already considering joining Sweden for its next class of submarine (A26), a plan similar to the now defunct Viking program.

The RNoN began conceptual studies for a replacement of the Ulas under the Ny Ubat Project 6346 program. Should feasibility studies conclude with the go-ahead to replace by 2015 in order to allow the first unit of the new construction submarines to enter service by 2020.

Cost for the replacement submarines are estimated to be as high as US$650M each, including through-life support contracts. This alone would put a huge strain on the already limited Norwegian defense budget. Currently, the Royal Norwegian Armed Forces (RNoAF) are involved in the acquisition of the Joint Strike Fighter (JSF) as well as the ARCHER artillery system and the final unit of the FridtjofNansen class frigate will deliver in 2010.

It is likely that Kockums of Sweden will be the preferred supplier of a new class of submarine for Norway if that option is selected and an acceptable offer can be reached. Much will depend on the outcome of the Swedish A26 submarine program, which entered the design phase in January (see A26 submarine article). Collaboration between the two nations would certainly aid in reducing the overall cost for all involved as well as continuing the ability to provide a subsurface deterrent to Russia’s Northern Fleet based in Murmansk.

SWEDEN – A26 Submarine Program Enters Design Phase

In late January 2010, AMI received information that the Swedish Government has approved the design phase for the royal Swedish Navy’s (RSN) A26 submarine program. Negotiations are currently ongoing between the Swedish Defense Material Administration (FMV) and the government in order to complete a design contract by the end of the year. The program began in 2007 with initial feasibility studies for the acquisition of four new construction submarines that will be built at the Kockums Malmo Shipyard. The submarines will replace the remaining Gotland (A19) and Sodermanland (A 17) classes that were commissioned in the late 1980s through the mid-1990s.

A construction contract was initially scheduled for 2010, however, this date has probably slipped at least three years to 2013 as the design phase is just now beginning. Assuming a construction contract in 2013, the first unit would enter service around 2018 and replace SODERMANLAND.

The new A26 submarines are being designed for littoral operations but will also possess ocean-going capabilities and will have the Kockums Stirling Air Independent Propulsion (AIP) system for increased on station time. As noted in the Norway Future Submarine article, it is possible that these programs could be Jinked similar to the Viking Program of the 1990s in which Norway and Sweden joined with Denmark. The Viking program was terminated in 2004 as all three nations made drastic cuts to their submarine levels, with Denmark decommissioning its entire force.

Since the discontinuation of the Viking Program, and the resurrection of independent submarine programs for both Norway and Sweden on a similar timeline, it would make sense for both countries to take advantage of the economies of scale from doubling the number of hulls built. This submarine design could also be attractive to Singapore if and when it makes a decision on whether to procure new construction submarines later in the decade. For Kockums, this program could be just what the doctor ordered to keep the yard going over the next several decades.

ISRAEL – NEGOTIATING A Sixth Submarine and New Frigates

In mid-January 2010, AMI’s sources indicated that the Israeli Navy was in negotiations to acquire a sixth submarine and two MEKO frigates from Germany. The following information is provided for both programs:

A: Dolphin II Class Submarine: The submarine will be the third DOLPHIN II. The first two units are already under construction at Howaldtswerft Deutsche Werft AG (HDW) in Germany. Although the actual cost of the DOLPHIN JI is around US$700M, Israel will push for deep discounts as it did for the first five units. As a reference point, the Israelis paid an estimated US$459M (per unit) for units four and five. With units four and five due to deliver by 2012, AMI estimates that negotiations for unit six will be completed by 2011 in order to start construction in 2011 as unit five is launched.

HDW built and delivered three Dolphin class submarines to Israel between I 994 and 2002. The first three Dolphins replaced the three Gal Vickers class in the Israeli sea service. By 2004, Israel made the decision to double the size of its Submarine Force to six units with the three additional units having the Air Independent Propulsion (AIP) capability to operate longer on station.

In late November 2005, Germany agreed to sell the two additional Dolphin II class (Type 800) submarines to Israel for US$1.37B, with Germany paying the first US$452.IM. The program officially started in 2006 with construction beginning in 2008.

B: MEKO Frigate: The frigates are based on the MEKO design and are meant as the follow-on surface combatants to the three Northrop Grumman SAAR 5 corvettes delivered in the 1990s. In 2009, the Israeli Government cancelled negotiations with the US companies offering two options, the Lockheed Martin variant of LCS and the Northrop Grumman SAAR SB.

Israel cited cost as the reason to explore other avenues outside of the US. Given the success with Germany in its submarine programs, Israel decided to explore the German surface combatant design with construction to take place in Israel. Those negotiations are still ongoing as of mid-January. Israel, with a budget estimated to be only US$300M per vessel, is exploring the MEKO I 00 as well as the stretched MEKO I 00. The stretched MEKO I 00 is a more realistic hull size considering the AA W, ASuW and ASW capabilities Israel requires. Unfortunately, it will be almost impossible to procure these capabilities at US$300M per ship unless the Israeli Government can receive steep discounts (or other financing initiatives) from the German Government as it has done in the procurement of its Submarine Force.

AMI believes that Israel will have a difficult time in this case as Israel wishes to build the frigates in-country and the German Government has no incentive to reduce the price unless the vessels are built in Germany. In order for Israel to utilize US Foreign Military Aid (FMA) funding, a big portion of the systems (weapons, sensor, engines etc) will have to be US supplied.

One must also wonder if Israel can build a sophisticated platform of this size without suffering massive cost overruns and schedule delays; which would make the program vulnerable to competition from urgent Air Force and Army procurement requirements.

Thailand-In the Market for Used Submarine?
In early January 2010, the Royal Thai Navy (RTN) Chief Admiral Kamthom Pumhirun continued to assert publicly the intention of the Thai sea service to acquire submarines in the future and announced that a feasibility committee had been established in order to study submarine technology. The Admiral estimated that the new submarines would cost around US$607M per unit and that it would be several more years before the sea service could move forward with such a plan.

For reference purposes, the RTN’s modernization plan, known as the Mega Plan of 2005, called for the procurement of two submarines by 2017. However, the plan has faced many delays due to funding shortfalls and political upheavals that continue to plague the nation. To date, the only portion of Mega Plan that is moving forward is the acquisition of an Endurance class LPD from Singapore.

The Admiral also mentioned that the RTN would first be interested in a used submarine for training purposes as the sea service had not operated a submarine since 1951 and that the estimated US$60M for a used submarine would be more affordable in the near term.

The Navy Chief briefly stated that submarines were now a necessity for Thailand as all of its neighbors including Malaysia, Singapore, Indonesia and Vietnam were operating or ordering new submarines.

With a feasibility committee now working on acquiring a submarine program, the RTN will no doubt begin looking into its used options on the international market once again. Some of those options could include the Israeli Gal class, Rotterdam Drydock Company Submarines (ROMS) Zwaardvis class, Gennan Type 206s and several Chinese designs.

When considering the age and material condition of these submarines, it will probably be quite an expensive endeavor to return one to operational status and that will only be the first step in getting the RTN back into the submarine business, in which it has been absent for over five decades. The success of this first step will determine whether the RTN will have any chance of reintegrating a Submarine Force into the sea service.

CHINA – Country Highlight
China has embarked upon a long-term program to achieve Great Power status. Elements of the Chinese People’s Liberation Army – Navy (PLAN) have argued for the creation of a modem blue water navy, including the acquisition of aircraft carrier battle groups. While there is no firm government consensus evident that details the future of the PLAN, considerable emphasis has been placed on increasing the number and capabilities of the submarine and large surface combatant fleets. With ever increasing acquisition budgets, the PLAN will continue to grow in numbers and capabilities for the foreseeable future.

Presently, it appears that the PLAN will receive continued support for its programs, allowing for the acquisition of new, more advanced, warships as well as the modernization of older platforms. Additionally, the defense white papers released in 2000, 2002, 2004, 2006 and 2009 are based on much the same criteria as in the 1998 white paper, however put much more emphasis on the fact that the US is now to be considered a hegemonic power as well as making note of the subprime mortgage crisis and global economic slow-down.

The Taiwan independence issue is specifically mentioned with procurement and modernization programs indicating that China is realigning some of its force for potential conflict with the island nation. Quoting the 2004 white paper, “We will never allow anyone to split Taiwan from China through whatever means,” the paper says. “Should the Taiwan authorities go so far as to make a reckless attempt that constitutes a major incident of ‘Taiwan independence’, the Chinese people and armed forces will resolutely and thoroughly crush it at any cost.” This thought was again reiterated in the 2006 white paper but not in such strong language and again in the 2009 version.

Part of the PLA’s strategic plan to defend China’s seaward approaches, and its sea borne economic interests lies in the notion of being able to operate its naval forces in two distinct zones Known as the Inner Zone and Outer Zone island chains, the PLAN is already modernizing its forces for the Inner Zone (defined by Japan, Senkaku, Taiwan, and the west coast of Borneo – thus including the whole South China Sea). Chinese leaders have consistently stated that the PLAN should be capable of extending China’s maritime influence out to the Outer Zone bounded by the “second island chain” (defined by the Kuril, Bonin, and Marianas Island groups). The PLAN has publicly stated that it wilt not have the proper naval forces to defend China’s interests to the Outer Zone until at least 2020.

The majority of the PLAN’s current fleet consists of technologically obsolete ships although the last several years have shown a vast increase in the construction of more modem warships being built including the Luyang II (052C) class destroyer with its phased array radar, Luyang I (052B) class destroyer, Luzhou (05 lC) class destroyer, Jiangkai (Type 054) class frigate, Jiangkai JI (Type 054A) class frigate and the Houbei (022) class Fast Attack Craft (F AC). China certainly has the raw industrial capacity to build large numbers of naval ships (both surface combatants and submarines), but it lacks the technological base to equip its ships with the modem engineering and combat systems needed to make them operationally effective in today’s multi-threat environment. China desperately wants to acquire these technologies and is eager to purchase them from Western suppliers. Ultimately, China’s desire to develop the indigenous capability to produce modem warships, with all their own systems, is slowly coming to fruition; however it is apparent they are still relying on foreign, primarily Russian, weapon and radar systems. With acquisitions from foreign markets and reverse engineering, it is likely China will continue to make progress in the technological advancement of the Navy over the next decade.

To truly achieve Great Power status, China will have to overcome a host of institutional problems (economic, political and social) to create a nation able to catch up with the technological advances of the West. If some of the positive trends currently emerging are allowed to develop, China could emerge, by 2020, as a formidable power, being able to adequately operate a modern blue water navy to the Outer Zone.

Currently, the PLAN is continuing to order and take delivery of several classes of conventionally powered submarines, destroyers, frigates, FAC and patrol boats. Additionally, the PLAN is making more headway in its transition to more capable nuclear-powered submarines as well as larger, more sophisticated warships in order to meet its goals of defending the nation’s interests in the Outer Zone. With the apparent assistance from foreign countries, China has seemingly vaulted ahead in this endeavor in the past 3 years. Numerous western combat systems and ship designs as well as engineering systems have begun to emerge in the increasingly more technologically sophisticated destroyers and frigates being built for the PLAN.

The PLAN currently has the following submarine shipbuilding programs underway or planned for the next several decades:

Shang Class (Type 093) Nuclear Powered Attack Submarine (SSN): The first of a new class of SSNs to follow the five units of the Han class. Designed in the latter 1990s, the first unit was built at the Bohai Shipyard, launched by the end of 2002, and commissioned in 2005. The second unit of the class launched in late 2005 and commissioned in 2007 followed by unit three in late-2009. At least five additional units of this class will probably be constructed through 2019 with two units currently under construction.

Jin Class (Type 094) Nuclear Powered Ballistic Missile Submarine (SSBN): This new class of SSBN had been in the planning stage since the commissioning of the single Xia class SSBN. Construction of the first unit probably got underway in the 1999-2000 timeframe at the Bohai Huludao Shipyard. The first unit of the class was launched in December 2004 and commissioned in 2006, entering full service in 2008. Unit two commissioned in 2008 and is completing sea trials. It should be fully operational in 2010, about the same time unit three will commission and begin trials. The Type 094 uses the same nuclear power plant and other common systems that are also found on the Type 093. At least six units of the class will ultimately be built.

Yuan (Type 041) Class Submarine (SS): The PLAN launched the first of the Yuan (Type 041) class conventionally powered attack submarine in early 2004, nearly four years earlier than had been projected. This launching demonstrates that the PLAN is moving ahead much faster than originally anticipated two years ago with construction programs in both surface and subsurface vessels. The second unit of the class was commissioned in February 2007 following six months of acceptance trials. Unit three was launched in March 2008 and was delivered in 2009. It is anticipated that seventeen more units will be built, approximately six years behind the original schedule, through 2027.

ALGERIA: On 18 December 2009, the first of two Kilo class submarines built at Russia’s Admiralty Shipyards, was handed over to the Algerian Navy. The second unit will be handed over by the end of 2010.

SPAIN: On 19 January 2010, Navantia cut steel at its Cartagena yard for the fourth and final S80 submarine (S 84) for the Spanish Navy.

From the February 2010 Issue
TAIWAN – US Prepares Arms Package
In early February 2010, the US Government announced its intention to sell US$6.4B of weapons to Taiwan. Included in the package are 114 Patriot (PAC-3) missiles, 60 Black Hawk helicopters, two used Osprey class coastal mine hunters (MHCs) and Harpoon telemetry test missiles. Noticeably absent from the announcement were F-16 fighter jets and submarines.

The US has remained silent on the submarine transfers to Taiwan since the 2001 Congressional notification when president George W. Bush announced plans to sell diesel electric submarines to the island nation. Press reports from Taiwan indicate that the Taiwanese Government has dropped the 8-year old request although official government reports indicate the press reports are false and the island still requires diesel-electric submarines. AMI believes that the submarine program is stalled due to foot dragging on both sides of the Pacific for the past eight years. The final act, in killing a submarine transfer may have been the election of Bejing-friendly President Ma Ying-jeou in 2008. Taiwan realistically has only one possible submarine supplier, the US. The US has not designed or built a diesel submarine in five decades.

MALAYSIA – Scorpene Program Complete, no Additional Units Planned
In early February 20 I 0, AMI received information that the second Scorpene submarine delivered to the Royal Malaysian Navy (RMN) in November 2009 would be the final unit of the class. AMI originally projected that the RMN would order up to three additional Scorpenes (by 2016) as the sea service has a standing requirement for a five-unit Submarine Force.

It would be more practical logistically and in training for the RMN to operate a single class of submarines vice several different classes. AMI’s source indicated that the RMN had no intentions of procuring additional units in the near term. The lack of an order for additional units at this juncture may merely indicate that the RMN intends on gaining operational experience in the near term before committing to additional submarine investment.

Once the RMN is operationally proficient and the Scorpene design is fully tested, the sea service could then order additional submarines to fill out its projected five unit Submarine Force. The RMN successfully completed underwater trials for its second submarine (KD TUN RAZAK) in late February following rumors and reports of several technical problems. Although the problems were highly publicized, AMI believes that similar to Chile, these issues are common in most newly-built submarines and typically corrected during sea trials.

As mentioned above, it would be practical for the RMN to operate a single class of submarines. However, only training, sustained operations and thorough testing of the Scorpene design will give the sea service a true picture on how many submarines it requires and the design of the submarine to meet the fleet’s future needs.

AMI estimates that this decision will not be made prior to 2016. At that time, the RNM should have a much better idea of numbers and capabilities. AMI believes that if the RMN intends on keeping at least two units operational at all times as well as performing proper upkeep in the fleet; at least two and possibly three additional units will be needed. This assumes a standard of two units operational at any given time, one or two in the maintenance cycle and the remaining one or two units in a training status.

MIDDLE EAST/NORTH AFRICA (MENA) – DIMDEX Submarine and Undersea Warfare Market Forecast

Key Points:

  • Future opportunities for new submarine export sales in the MENA region look most promising in North African countries.
  • Iran’s continuing investment in submarine capability and the potential deployment of submarines by other navies in the Gulf region continue to influence the acquisition of anti-submarine warfare capability on surface ships and aircraft.
  • Many MENA navies in the Gulf Region are adding or plan to add advanced corvettes and frigates to their forces over the next decade. Prospects for new sales of submarines to these navies are expected to remain more limited over the same period.

In 2010 AMI will once again join hosts QMDI and the Qatari Emirate Naval Forces (QENF) at the second Doha International Maritime Defense Exhibition and Conference- DIMDEX- from 29-31 March 20 I 0. This article looks at market prospects for submarine and related anti-submarine warfare capabilities in the Middle East/North Africa region over the next 20 years.

The new construction and refit market for submarines in the MENA region is currently concentrated in North Africa, where countries such as Algeria and Libya look to modernize or replace aging Russian-Soviet platforms with newer capabilities. In the Mid-East/Gulf region, Iran remains the largest current investor in submarine capabilities- both domestically built hulls and potential foreign orders.

The chart below shows AMI’s forecast for future spending on submarines and ASW-capable ships in the MENA market over the next 20 years. As noted, Iran is building up its submarine capability in the Gulf region, while Algeria and Libya are upgrading their Submarine Forces in the North Africa region. Egypt retains a force of updated Chinese Romeo diesel boats, and is making some current investments to improve its swimmer delivery vehicles for special-forces use. So far, Gulf countries that have invested to modernize their surface forces in recent years- Oman, Qatar, UAE, and Saudi Arabia- have not looked to add a submarine dimension to their naval surface and air capabilities.

This is not surprising in that the submarine represents a significant investment not just in hulls but in crew training, shore infrastructure, associated rescue and salvage capabilities. Moreover, the current operational environment in the Gulf region has influenced many nations to focus their naval investments on moving from coastal/inshore to a more well-rounded surface fleet centered on larger ships. As noted in previous analysis of the MENA market, the fastest growing naval market segments in the region are frigates, corvettes and OPVs (see the attached Morocco country report for an example of this trend).

The submarine challenge will continue to influence the region’s naval spending on more capable frigates, corvettes and OPVs. AMI forecasts that continued improvement in surface ship capabilities, new helicopters and fixed wing patrol aircraft, upgrades of existing Submarine Forces, and perhaps eventual acquisition of submarines by navies that do not currently operate them, will continue in the MENA naval market.

As the MENA region’s economies rely on critical shipping lanes and choke points that ensure resource flows in the global economy. The vulnerability of this trade to closure or interdiction by submarines will ensure ASW remains an investment priority in the region’s naval market.

Naval Market Value Forecast 2010-2030: Middle East and North Africa
Analysis of Selected Segments

Country Algeria Bahrain Egypt Iran Kuwait Libya Morocco Oman Qatar Saudi Arabia Tunisia UAE Yemen Total
Frigate 0 0 0 0 0 0 1100 0 0 2800 0 0 0 3900
OPV 0 0 0 0 0 30 0 280 0 0 0 0 0 310
Petrol Vessel 168 144 130 125 65 0 450 48 208 340 350 36 40 2104
Submarine 400 0 5 1500 0 700 0 0 0 0 0 0 0 2605
Total 2009
(USD B) 568 144 135 1625 65 730 1550 328 208 3140 350 36 40 8919

Highlights of Current Submarine Programs in the MENA Market
ALGERIA: On 18 December 2009, the first of two Kilo class submarines built at Russia’s Admiralty Shipyards was handed over to the Algerian Navy. The second unit is scheduled to be handed over by the end of 2010.

LIBYA: Libya’s Foxtrot (Project 641) class submarines were commissioned in the 1970s and are at the end of their effective service lives. At least four of the six hulls are in the reserve status and none have been modernized since commissioning.

Libya now has the option to look to a wide variety of possible suppliers for the modernization and procurement effort since the European Union (EU) and the US lifted economic and military sanctions in 2004. Russia just concluded a major US$ l.8B agreement for new equipment sales to Libya- that package may include submarines. European candidates to supply new submarines include Italy, France, Spain and Germany. Turkey and South Korea may also see Libya as an opportunity for export of products from their domestic submarine industry.

IRAN: Iran has been developing a domestic submarine building industry since at least 2002, when construction commenced on small submarines displacing about 120 tons. In 2007, Iran started to build a larger submarine-the Qaeem class- with launch of the first unit expected in 2010.

The Qaeem class is a coastal submarine displacing 500-1000T and will be capable of launching torpedoes, mines, and possibly missiles. The Qaeem class will augment Iran’s force of larger Kilo class submarines, acquired in the 1990s and expected to reach the end of their service life by 2020.

Iran may also be considering the procurement of additional submarines from Russia, including the latest Kilo (636 variant) or the Amur design. The timeline for delivery is seen as 2015-2016, suggesting that an order for new subs would need to be placed within the next year to enable building to start in Russia by 2012.

CAPT William H. Barnes, Ill, USN (Ret)
CAPT Robert C. Gillette, USN (Ret)
QM2 (SS) Daniel Dibert, USN (Ret)
RM I Terry Alvin Marschel, USN (Ret)
CAPT Joseph M. McDowell, USN (Ret)
CAPT L. Rehme, MC. USN (Ret)
LCDR James H. Peirano, USN (Ret)
Mrs. Sylvia Rindskopf
CAPT W. David Wessinger, USN (Ret)
CDR Avery L. Willis, USN (Ret)

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