You’re Never Beaten Until You Admit It

“You’re never beaten until you admit it.” a beautiful and very true quote from General Patton.

Just when South Korea seemed to have won the bid for producing submarines for Indonesia, Turkish officials deny being defeated.

Indonesia, the world’s largest archipelago with more than 17,000 islands, lies across shipping lanes between the Indian and Pacific oceans as well as between Asia and Australia, heavily used for transporting commodities and energy. It the Indonesian Navy has two German Type 209 class submarines, INS Cakra and INS Nanggala both commissioned in 1981. Both boats have been refitted at least three times to keep them working. But as they near the end of their service life Indonesia seeks new submarines.

Indonesia is one of the oldest submarine operators in the South East Asia region and had submarines in commission since 1960s. Indonesia wants to boots its submarine fleet to 12 diesel-electric submarines by 2024. But financial realities will force the country to replace the existing boats with three submarines with AIP capability.

Indonesian government decided to replace the existing German submarines by newer German submarines. There are two competitors in the bid: Turkey and South Korea. Both Turkey and South Korea are using Type 209 class submarines in their own navies and both countries have the expertise to produces these type of submarines in their own shipyards with German material aid and assistance.

Certainly this is an interesting competition to watch. Usually each competitor would  offer their own unique product or solution in such procurement projects. But in this one (I do not recall any previous project) two different nations were offering the same product licensed to them by a third country.

Each bidder has some advantage the other does not posses: South Korea has upgraded the Indonesian submarines once between 2004 – 2006. Furthermore South Korea has good standing relations with Indonesian Navy. Indonesia bought LPD’s, LSTH’s and patrol boats from South Korea.

A Type 209/1400 class submarine of Turkish Navy

Turkey can transfer two submarines immediately, to keep Indonesian submarine force intact until the new boats are commissioned into Indonesian Navy. The  trump card Turkey holding is the official support of the original producer of the Type 209 submarines: The HDW shipyard.

On 11 October 2011, South Korean Daewoo Shipbuilding & Engineering said that it aimed to seal a $1.1 billion agreement with the Indonesian government by November to build three submarines. The South Korean shipbuilder said in a statement that this would mark the first exports of submarines from the country. “We have launched talks to sign a submarine contract with Indonesia’s defence ministry and marine,” Daewoo said in a statement.

Although the final details of the agreement are still being negotiated, it is certain that DSME will provide the Indonesian Navy with three indigenously developed 1,400-ton attack submarines. The Korea Times explains that the vessels, which will be built with technical assistance from Germany’s Howaldtswerke-Deutsche Werft (HDW, ThyssenKrupp Marine Systems group), will be powered by diesel-electric engines.

The submarines will measures 56 meters in length and 5.5 meters in width and are expected to be capable of reaching a depth of 250 meters and of remaining submerged for about two weeks. Crewed by 33 sailors, the vessels is planned to achieve a surface speed of 11 knots and 22 knots underwater.

As Arirang News reports, Daewoo prevailed as preferred bidder for this significant project over competitors from France, Germany and Russia. Although Indonesia is already operating two Cakra-class attack submarines of the HDW-developed Type 209 design, France and South Korea dominated the competition and entered the final round in June 2011.

Well at that time this news meant that Turkey has lost the race to South Korea. But “You’re never beaten until you admit it.”

Turkish procurement officials have denied a South Korean claim that the Korean Daewoo Shipbuilding and Marine has defeated a joint bid by Germany and Turkey to sell submarines to the Indonesian Navy.

‘’We are constantly in touch with Indonesian authorities. Together with Germany, we will soon submit an offer outlining our final offer with very favorable conditions. Indonesia is waiting for that,’’ a procurement official told the Hürriyet Daily News recently on condition of anonymity.

‘’In addition, Germany’s Howaldtswerke-Deutsche Werft [HDW] is our full partner and is the builder of the HDW-class 209 submarines that Indonesia wants to buy. We don’t know how the South Koreans may overcome this license problem, because HDW is working with us,’’ the official said. ‘’For us, the competition is continuing.’’

Daewoo Shipbuilding & Engineering said earlier this month that it aimed to seal a $1.1 billion agreement with the Indonesian government by November to build three submarines. The South Korean shipbuilder said in a statement that this would mark the first exports of submarines from the country.

The emphasis is mine.

So the race is still on. Let the best licensee win.

5 Responses to You’re Never Beaten Until You Admit It

  1. Dave Shirlaw says:

    Or waiting for bribes from France….?

  2. No. The Indonesian government definitely eliminated the Russian and French solutions. But I must admit that the French do find interesting ways to sell their goods.

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