27 October 2011

Turkey Denies Losing Deal for Indonesian Navy Submarines

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.

“We have launched talks to sign a submarine contract with Indonesia’s Defense Ministry,’’ Daewoo said in a statement.

A team of Turkish and German companies and Turkey’s procurement office are also jointly seeking a contract to sell two HDW-class 209 diesel submarines to Indonesia worth about $1 billion in an offer with sweeteners against the South Korean rivals.

French and Russian companies dropped out of the bidding for the Indonesian Nay deal earlier, allowing South Korea’s Daewoo Shipbuilding & Marine to emerge as the leading candidate. Daewoo was expected to bid together with HDW, but it later decided to bid on its own.

Facing the threat of being left out of the deal, HDW, a subsidiary of ThyssenKrupp Marine Systems, approached the Undersecretariat for Defense Industries (SSM), Turkey’s defense procurement agency.

Together with Turkey, HDW also is manufacturing six modern U-214 diesel submarines for the Turkish Navy. In partnership with HDW, Turkey earlier built 14 U-209 submarines, which Indonesia now wants to buy.

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