Monday, March 14, 2016

Germany, Norway eye joint submarine procurement

Lars Hoffman, DEFENSE NEWS
11 March 2016
GÖTTINGEN, GERMANY – Norway plans to complete the definition phase for the procurement of new submarines in the first half of this year and may consider a joint purchase with another country.
The Norwegian Ministry of Defense is negotiating with several different shipyards but has not yet chosen a supplier for new submarines, it stated in a press release.
Norway has to replace its six Ula-class submarines, which will gradually reach their end of life in the 2020s. According to the release, Norway is also in discussions with several nations to establish the basis for submarine cooperation.
Last year, Norwegian Defense Minister Ine Eriksen Søreide suggested a joint procurement with Poland during her visit to the MSPO exhibition in Kielce. Another potential partner is Germany.
According to sources familiar with the subject, beside Germany, South Korea, Italy, Sweden, France and Spain qualify as supplier countries. Germany has had traditionally close military links with Norway and a track record of decades-long cooperation in naval construction. Norway's Ula submarines go back to a German design, while the first four German class-212 A submarines were equipped with a Norwegian battle management system.
Germany is also home to ThyssenKrupp Marine systems, which is considered a global leader in building non-nuclear submarines.
“Germany is therefore a nation which it is natural for Norway to discuss a potential future submarine cooperation with,” the Norwegian MoD writes. Industry also will play an important part in future submarine cooperation, the ministry stressed.
These topics were discussed in early February with German partners in Berlin during a visit of a Norwegian delegation led by Defense State Secretary Øystein Bø and National Armaments Director Morten Tiller.
The German MoD is interested in cooperating with the Nordic country because the German Navy plans to purchase two to four submarines in the second half of the 2020s. Since the ministry has classified submarine construction as a key technology, which is to be kept in Germany, shipyard capacity utilization is a necessity. Therefore, the proposal is on the table to combine the Norwegian and German procurement projects.
To save costs, the German MoD wants to employ a single design for both nation's boats. The Norwegian side submitted a draft with its submarine specifications for review to Germany last year.
In case of a joint procurement, Germany wants to function as lead nation and assume project responsibility, stated the German MoD. To reduce the life-cycle costs, maintenance and operation also should be managed in cooperation.
And as Gundbert Scherf, responsible for armaments cooperation with foreign countries in the MoD, said several months ago, the German Navy could imagine a common military submarine command with the Norwegians.
One major hurdle remains: The Norwegians want to open the German defense procurement market to companies from the Scandinavian country. According to Torbjørn Svensgård, the president of the Norwegian Defence and Security Industry Association, it is easier for its member companies to have success in the U.S. market than in the closed European armament markets.
"Norway wants market access in the country, from which we obtain the submarines," he stressed.
Svensgård advised the competing yards not to rely solely on their technical expertise and thus to feel too safe. He pointed to the procurement of the Fridtjof Nansen-class frigates several years ago. While German and British shipyards would have expected to get a contract, the order was finally given to Spain.
“If the prospective suppliers don't listen carefully to the customer and provide a comprehensive response to all requirements, including those related to industrial cooperation, it could end similar when it comes to submarines,” he warned.
Katrin Suder, German secretary of state for armament, said that a procurement of the naval strike missile and the battle management system, both produced by Norway's Kongsberg, is "conceivable." The condition for such a deal, however, is a previous tender process. In case of a jointly developed product between Norway and Germany, this could be obtained without competition, the secretary of state said. It remains to be seen whether this German approach fits the requirements of the Norwegians.
In terms of shaping industrial cooperation, the Norwegian state has better options than does the German Defense Ministry, as Norway holds a majority stake in the publicly listed technology and armaments group Kongsberg, Norway's defense industry leader.
In contrast, the entire German armaments industry is privately organized, which leaves the German MoD with little direct influence.
Although Norway plans to procure more boats than Germany, the position of Germany as a lead nation in this program seems to be acceptable. Svensgård said he sees no fundamental problems.
“With such arrangements, we've had good experiences at U.S.-led projects,” he said. Norway participates in the construction and development program for the American F-35 fighter aircraft.
“In the past, it had rather been a problem with European armaments projects, that no one was taking the leadership role,” Svensgård said. However, it is important for a lead nation that it is prepared to listen to and accept suggestions, he says. “And of course, the long-term obligations have to be met.”

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