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NRP Tridente Type 209PN - Program

Although designed as the Type 209PN, these submarines are in fact unrelated to the earlier Type 209, and are in fact the HDW Type 212 SSK design. Howaldswerke Deutsche-Werfte AG (HDW) built the Portuguese type 209PN submarines. In August 2010, the navy took delivery of the NRP Tridente, handed over at the Baltic coast shipyards of Howaldtswerke-Deutsche Werft, and on 29 December 2010 Portugal took delivery of the second of two Class 209PN diesel submarines, the NRP Arpao [Harpoon].

With the first of the two submarines conducting sea trials and scheduled to arrive in Portugal in spring 2010 and the second in spring 2011 -- Portuguese crews had been training in Germany for some time -- the Portuguese prosecutor's office filed charges 30 September 2009 against seven Portuguese and three Germans involved in the deal for forging contract documents and defrauding the Government of Portugal out of approximately 34M Euros.

Since the late 1990s, the Portuguese Ministry of Defense had been interested in replacing its last operating Cold War-era submarine -- commissioned in 1968 -- by 2010. The acquisition was controversial from the beginning and was hotly debated in Parliament, proponents arguing that Portugal, with its maritime history, required the submarines to protect its vast maritime territory while opponents countered that a country of 10 million could not afford them. In the end, Parliament approved the purchase and, in 2003, the Portuguese government -- then led by the center-right Social Democrats (who were later in opposition) -- put out for bid a contract for two diesel submarines. While companies from five European countries submitted bids, the Government of Portugal selected a proposal from a German consortium as best in price, offsets, and operational capability.

In April 2004, the Government of Portugal signed a contract with the German Submarine Consortium, an enterprise composed of the two German yards with experience in making submarines, for the construction of two specialized diesel submarines at a cost of over 800M Euros (approximately US$960M in 2004), with an option for a third. The parties agreed, however, that the German Submarine Consortium would provide trade offsets, such as the creation of industrial projects in Portugal, worth 1.21 billion Euros. As is customary, the offsets were specified in a separate, not publicly available, contract. An "offset" is a contract mechanism by which the buyer requires the seller to reinvest a portion of the contract price in the buyer's economy. They can take many forms, including co-production, subcontractor awards, technology transfer, and local investment.

Defending the submarine purchase on 15 October 2009 during his annual state of the Navy address, Admiral Fernando Melo Gomes, Chief of the Portuguese Navy, spoke in generalities when he declared that Portugal could not "dispense with submarine weapons" and "cede to others its sovereignty and responsibility to intervene in maritime zones within the national interest." Noting that the purchase had been approved by the political establishment, Gomes concluded, "To have submarines is expensive, very expensive, but more expensive would be not to have them, especially for those generations that follow us."

The submarine purchase impacted the 2010 defense budget. Assuming 2009 figures, the submarine purchase represented more than 50 percent of the defense budget, which itself constitutes 3 percent of the entire government budget. The 1 billion contract for the submarines is Portugal's biggest ever military purchase and amounted to 0.6% of the country's gross domestic product (GDP), at a time when the budget deficit reached 9.3%of GDP in 2009.

Further, the Government of Portugal did not include maintenance, training, salaries, and operating costs (including the torpedoes) in the purchase price. Combined costs will surely run into the tens of millions of Euros annually. At one point in 2008, press reports suggested that the Government of Portugal was entertaining the possibility of selling the submarines to Venezuela, though the Government of Portugal immediately denied the report. According to press reports, the Ministers of Defense and Finance were reportedly collaborating to solve the problem at that time, even as then Economic Minister Manuel Pinho was publicly criticizing the purchase as an "unnecessary expenditure."

European Union rules provide that defense purchases be applied to the budget the year they become operational, regardless of whether the purchase will be financed over several years. The Government of Portugal may well be forced to play budgetary juggling to comply with EU rules. Because the Government of Portugal will receive one of the submarines in 2010 and the other the following year, the Government of Portugal may be able to split the cost over two years, softening the impact. In any case, the Government of Portugal would not cancel the deal. Although the media ran unsourced reports that the government was considering nullifying or renegotiating the contract, the Permanent Commission on Offsets (a Government of Portugal Ministry of the Economy agency responsible for the implementation of Portuguese Offset Law), stated that it remained committed to comply with the Portuguese government's contractual obligations.

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Page last modified: 14-02-2013 18:23:50 ZULU