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Further Reading

SS-X Submarine

Korea made its first step into the global submarine exports market by securing the country's largest single overseas defense contract. Korea's Daewoo Shipbuilding and Marine Engineering said on Monday 11 October 2011 that it will sign a contract with Indonesia in November to build submarines. This marked the company's first export order for such a project and Korea's biggest overseas defense contract in terms of size.

Under the 1.1 billion-US-dollar-deal, DSME, the world's third-largest and Korea's second-largest shipbuilder will build three 14-hundred-ton, "self-developed" submarines for the Indonesian Navy. Daewoo says it will coordinate details with Indonesia's defense ministry and conclude the deal by November. DSME had been bidding for the contract against competitors from France, Russia, and Germany. In June 2011, Indonesia announced both Korea and France as the preferred bidders but it dropped France making the Korean shipbuilder the sole preferred bidder for the project.

Indonesia's navy has long deployed two German-made submarines. Indonesia has set the target of having 12 diesel submarines in the submarine fleet by 2024. Indonesia was interested in more submarines in the near future to supplement its two ageing Type 209-class submarines. The first one, KRI Cakra was refitted by Daewoo Shipbuilding and Marine Engineering (DSME), South Korea between 2004-2006 and was now back in service, while the second Type 209-class submarine, KRI Nanggala was also overhauled, starting in December 2009. The submarine will be renovated and returned to Indonesia in the second half of 2011 under a $7.5 million contract. Components to be overhauled includes the engines, batteries, and combat system.

The government had planned to buy as many as five submarines to strengthen the country's sea defense. Among the prospective shipyard expected to bid for the contract includes DSME, South Korea and HDW, Germany. Among the candidates are submarines from Russia, South Korea, China and German. Some reports mentioned that the Amur-class submarines from Russia was a favorite as it is more cost effective compared to other offerings. South Korea was interested in trading its 1,300-ton Type 209 diesel-electric submarines with Indonesian CN-235 aircraft. The deal, estimated to be worth in the region of US$1 billion, was reported to be two submarines for eight aircraft.

The Russian Navy sent a proposal to the Indonesian government in January 2006 to purchase 12 diesel submarines from Russia by 2024. First Admiral Abdul Malik Yusuf, the chief spokesman for the Indonesian Navy, said that combat submarines were needed as strategic armaments, enabling the country to maintain security in its territorial waters. Indonesia's leading magazine, Tempo, quoted the admiral on its Web site as saying that the waters of the earth's largest archipelago were currently defenseless against the penetration of foreign ships. In light of this, the Indonesian navy turned to the country's leadership with a proposal to purchase six Kilo-class submarines worth $1.9 billion from Russia in the next five years. The proposal had not yet been accepted due to insufficient budget funds, the magazine said. The Antara news agency said 19 October 2006 that the Indonesian Navy planned to buy several modern diesel submarines from Russia. The agency quoted Navy Chief of Staff Admiral Slamet Soebijanto as saying that the decision to acquire four Kilo-class and two Amur 950 (Lada-class) submarines had been taken because of Russian-made submarines' advantage over their German and French equivalents in terms of reliability and cost. The Amur 950 submarine is a smaller version of Project 677 or Lada-class diesel submarine, and is designed to operate in the littoral environment, in deep and shallow waters. The vessel features a new anti-sonar coating for the hull, an extended cruising range, and advanced anti-ship and anti-submarine weaponry, including the Club-S cruise missile system.

In August 2007 some sources reported that Indonesia might be seeking a $1-billion loan from Russia to pay for the fighters and finance the possible acquisition of a Russian-made Project 636 Kilo-class diesel submarine. In fall 2007, then Russian President Vladimir Putin agreed with Indonesia's leadership on Russia allocating a $1 billion loan for Indonesia to buy 22 helicopters, 20 tanks and two submarines made in Russia. Additionally, Jakarta said it would buy six Su aircraft worth a total of $335 million.

On 11 August 2008 the Indonesian Navy commander said Russia was shortlisted for a $700 million contract to deliver two submarines to Indonesia. "Of the four bidders for the submarines, Russia and South Korea have reached the final round, passing France and Germany," Admiral Tedjo Edhy Purdijatno said. Russia's bid is the Project 636 diesel-electric submarine (export agent Rosoboronexport) while South Korea's is the U-209 sub manufactured by Daewoo Shipbuilding and Marine Engineering under German license. "One of the principal conditions [of the contract] is, among other things, the transfer of technology," Purdijatno said. The successful bidder was expected to be named by the end of August 2008. The Indonesian defense minister had said the submarines were to be delivered in 2011.

In June 2009 Daewoo International Corp. bid against Russia, Germany, and France to export two submarines to the Indonesian navy. It entered the second round of bidding competing against Russia. The two submarines, which would be manufactured by Daewoo Shipbuilding & Marine Engineering, would be upgraded versions of the 209 Changbogo-class.

Indonesian state ship builder PT PAL was bidding for a contract from the Defense Ministry to construct submarines worth between US$350 and $400 million each in 2010. "The Defense Ministry plans to buy submarines. We expect to win the contract so that we can build the submarines in our plant," PT PAL president director Harsusanto told The Jakarta Post on the sidelines of the IBBEX 2010 in Jakarta. PT PAL lacked experience in constructing a submarine. Some modules might be constructed overseas and we will ask foreign technicians involved in the project to transfer the technology to PAL.

On 09 September 2011 Indonesia and South Korea signed a Memorandum of Understanding (MOU) to strengthen defense bilateral cooperation. The MOU was signed by the defense ministry`s Director General of Defense Potential Pos Hutabarat and Lee Yong Dae, the director general of Force Policy Bureau. Indonesian Defense Minister Purnomo Yusgiantoro and South Korean Defense Minister Kim Kwan-jin witnessed the MOU signing. The two countries agreed to jointly produce landing platform dock (LPD) ship and submarine between PT PAL shipbuilding company and Daewoo Shipbuilding.