South Korean Firm Deal Daewoo to Bid onIndonesia Submarine Deal

7 Juni 2009

Chang Bogo class submarines (image : DSME)

JAKARTA-- South Korea's Daewoo International Corp. (KSE:047050), said Sunday it plans to bid for a contract worth about $1.2 billion to build two diesel-powered submarines for Indonesia.

Daewoo International said it will submit specifications to supply two 1,400-ton diesel electric Type-209 submarines to Jakarta.

The hulls of these vessels could cost $350 million apiece with critical sonar and combat management systems pushing the total price to $600 million.

The ships to be built are a modified version of the Chang Bogo class currently in service in the South Korean Navy.

Seoul operates nine such vessels that were built in the country using designs provided by Germany's Howaldtswerke-Deutsche Werft (HDW).

The company, which has been at the forefront of South Korea's arms exports, said winning the bid could open a new chapter for the country.

Changbogo's specification will be modified to 1,400 ton (image : DSME)

"The two vessels are equivalent to the country selling 70,000 automobiles and would be the first time South Korea has exported submarines," a Daewoo executive in Jakarta said.

He stressed that while the bid may not be easy to secure, the South Korean ship made by Daewoo Shipbuilding and Marine Engineering Co. does have a chance to compete with established submarine manufacturers from Russia, Germany and France.

Russia maintains a sizable submarine fleet and has exported its Kilo class ships to such countries as China and India.

Germany's HWD, owned by ThyssenKrupp, has an impressive record of exporting its Type-209 vessels to more than 10 countries.

Indonesia has two operational Type-209s in its fleet. France has been less successful in exporting its subs but may try to outbid others in order to win overseas buyers.

The Daewoo executive said that Russia, in particular, may offer $1 billion in loans to boost its bid, with the South Korean company countering with a proposal to construct a submarine rescue ship based on the 4,200-ton Cheonghaejin model currently in service if Jakarta accepts its offer.

Other advantages include Daewoo's close links with Indonesia, dating back to the early 1990s, including past support in such areas as maintenance for Indonesian submarines, construction of multipurpose logistics support vessels and basic Air Force trainers for the country.

It has also sold armored personnel carriers used by the police and secured a deal to supply a heavy armored car to Indonesia last year.

(Yonhap)