The world submarine situation.

Any navy with ambitions for true 'blue water' operations will eventually have to acquire a submarine capability. This is an inevitable and long accepted fact. Such a capability will provide tremendous operational flexibility in both offensive and defensive missions. Unfortunately, the acquisition of a submarine capability is a very expensive process, requiring far more than just the purchase of a submarine, its associated systems and weapons.

The acquisition of submarines commands the construction of specialised facilities to support and maintain the boats as well as the purpose training of personnel. Submarine crews and officers must also be selected and trained. The front-end acquisition costs of a submarine are high, as are the operational costs and price of necessary repair, overhaul and refit activity. Even so, for all of the associated investments, their operational utility is such that navies are prepared to pay the price to acquire them if at all possible.

Despite the obvious advantages of having a submarine capability, the overall marketplace and the shape of the submarine-building sector have changed dramatically over the last fifteen or so years. Arguably, the submarine sector has suffered more than most from the end of the Cold War and the resulting reductions in European defence expenditure. The European Nato nations were not only a major market for conventional submarines (SSK), they were also major centres for the design and manufacture of submarines. The end of the Cold War also had a tremendous impact on the submarine-building sector in Russia, as well as in neutral Sweden. Added to this decline in domestic European demand, economic problems in Latin America, which was traditionally a substantial SSK market, created a distinct decline in orders from that area as well.

All of this had significant industrial consequences in Europe, dramatically changing the industrial landscape during the 1990s. At this point it is worth noting that the majority of this article will deal with conventional submarines (SSK), but mention must be made of nuclear submarines as well. In Europe, only Britain and France have the capability to design and build nuclear attack (SSN) and ballistic missile submarines (SSBN). Outside of this the US and Russia also have these SSN and SSBN capabilities and, as we shall see later, so does China, and India is moving towards fielding an indigenous SSN capability. However, in numbers, if not in value, the SSK represents the most significant slice of the submarine marketplace.

A Changing Industry--Europe

Returning to the subject of changes to the European industrial landscape, the British took a decision to exit the SSK marketplace and focus on nuclear boats and in consequence the Royal Navy put its four new Upholder class SSKs up for sale (which were eventually purchased by Canada). In the Netherlands, RDM still retains submarine capabilities in terms of design and manufacture, but it has ceased to be a factor in the export marketplace and is confined to refit and support work for the Royal Netherlands Navy submarine fleet at present. Italy also retains a submarine design and build capability, although current activities are based on the production of two Type 212A boats under license from Germany; with this work due to be completed by 2006.

The critical players for SSK work in Europe are the traditional submarine powerhouse of Germany on the one side, with DCN of France teamed with Navantia of Spain on the other, although both DCN and Navantia retain independent SSK capabilities, which Navantia is pursuing with the $80 programme for the Spanish Navy. For the submarine sector in Germany, the phrase 'changing industrial landscape' is a rather inadequate description of the metamorphosis that has taken place. The changes in Germany also have wider implications in Europe as a whole.

The German Type 209 submarine has been one of the most significant factors in the SSK marketplace, receiving its first export order from Greece in 1967. Since then 14 countries have ordered the Type 209 and 63 submarines have been built or are on order. The most recent order was received in April 2004 with Portugal deciding to purchase two Type 209PN submarines. The problem for German industry was the collapse of domestic demand, with the German Navy only ordering four next-generation Type 212A boats in 1994. Some relief came with the 1998 Italian decision to acquire two Type 212A for production in Italy. Three Type 214 (essentially the export version of the Type 212A) were ordered by Greece in 2000 and were to be built by Hellenic Shipyards. The Republic of Korea also ordered three Type 214 submarines in 2000 to be built in Korea by Hyundai.

Howaldtswerke-Deutsche Werft (HDW) had become a player in European industrial consolidation with its acquisition of Kockums of Sweden in 1999. By 2002, HDW had gained management control of Hellenic Shipyards in Skaramanga, near Athens, a move compensated by a Greek Navy order for an additional Type 214 submarine and a major refit for three Type 209 boats. However, HDW had come under the control of One Equity Partners (OEP), an America venture capital organisation. There has been a great deal of speculation as to why OEP acquired HDW and as time went on it became apparent that OEP did not appear to be that certain of why they had become involved in German shipbuilding. Eventually they decided to capitalise on their investment and looked to find a buyer for HDW.

The fact that HDW was on the market excited a great deal of interest in the European naval scene. French industry was quick to grasp the possibilities and ideas were floated of a European naval company, a naval equivalent to Eads in the aerospace and defence sector. While the French might have been attracted to this idea the same was not true for German industry, who were of the opinion that it made far more sense to have a true national naval shipbuilding champion. The Germany-first approach was the one that achieved momentum and, on 5 January 2005, the formation of the ThyssenKrupp Marine Systems Group was announced. This was a merger of ThyssenKrupp Werften with HDW, in which ThyssenKrupp has 75 per cent of the shares and management control and OEP having a 25 per cent stake. With this merger the two main submarine yards in Germany, HDW and Nordseewerke, are combined in one company, along with Blohm + Voss, Kockums in Sweden and Hellenic Shipyards in Greece.

The resolution of the HDW problem and the creation of ThyssenKrupp Marine Systems puts the German submarine industry back on track. That being said, Germany will have to work extremely hard to regain its dominant position in the SSK marketplace, a position it enjoyed for some thirty years from the late 1960s onwards. As we have noted, the submarine marketplace in Europe is now totally different and the export market is not as large as it once was. On the other hand, the export possibilities that are available are highly lucrative, but here ThyssenKrupp is facing increasingly strong competition from the combination of DCN of France and Navantia of Spain with the Scorpene class.

Surging Scorpene

In 1997 the Chilean Navy decided to order two Scorpene class submarines from DCN/Navantia, marking the first export success for this new submarine class. The first boat, the O'Higgins, was handed over to the Chilean Navy in early September 2005 by DCN while the second boat, the Carrera, was floated at the Cartagena Shipyard of Navantia in November 2004 and is currently in the trials phase. The next major order for the Scorpene came in June 2002, when the Royal Malaysian Navy ordered two submarines for delivery in 2008 and 2009 respectively. This Scorpene has a length of 66.4 metres, a surfaced displacement of 1550 tonnes and a submerged displacement of 1705 tonnes. It has a crew of 31 and an endurance of 42 days.

It should be noted that both Chile and Malaysia opted for a standard version of the Scorpene with a conventional propulsion system, even though the Scorpene is available with the Mesma air independent propulsion system. The Mesma does have an export customer though, in the shape of Pakistan. In 1994 Pakistan signed a contract with DCN for three Agosta 90B submarines, continuing a trend of loyalty to French SSK designs.

In the late 1960s, Pakistan contracted for four Hangor (Daphne) class submarines from DCN, following that with a 1978 order for two Hashmat (Agosta 70) class; all of these submarines are still in service. Under the terms of the Agosta 90B contract the first submarine, PNS Khalid, was built in France (entering Pakistan Navy service in December 1999). The key area of the contract was a technology transfer programme to allow the Pakistan Navy Dockyard at Karachi to assemble the second boat (PNS Saad) and to build the third boat (PNS Hamza). As with PNS Khalid, PNS Saad is conventionally powered and was commissioned at the end of 2003. The PNS Hamza will be fitted with the Mesma system and is due to be commissioned in 2006. The Pakistan Navy Dockyard will then fit the Mesma system to the other two Agosta 90B boats as they come in for their refits.

Ironically, considering that Pakistan had long been a major customer for DCN, in terms of the Scorpene programme the main export target was India. In 1997 the Indian Ministry of Defence approved the Project 75 conventional submarine programme as a part of what was seen as a 30-year submarine programme aimed at providing the Indian Navy with a consistent force of 24 SSKs. The aim was to select suitable designs for the needs of the Indian Navy, whilst at the same time stimulating local naval industry development through the transfer of technology and the local assembly/construction of the selected designs. Prior to that point, the only local SSK work had been the assembly of two Type 209/1500 Shishumar class submarines at Mazagon Docks in Mumbai from kits supplied by HDW under the terms of a 1981 contract for four submarines. As such, Mazagon was the home of conventional submarine skills in India, but it was realised that there would be a need for a second yard with SSK capabilities if the 30-year submarine programme was to become a reality. At the time of writing there have been no moves towards identifying a second SSK yard.

When the Indian Navy came to work on the Project 75 programme it found its list of potential submarine choices limited. At that time HDW could not be considered for any defence programmes as it had been blacklisted by the Indian government due to allegations of corruption in the Type 209/1500 Shishumar contract. It should be noted that these allegations were nothing more than allegations, and that in March 2005 the Indian courts absolved HDW of any blame or wrongdoing regarding the Type 209 sale. With no HDW to consider the Indian Navy also found itself encouraged not to look to Russia for a solution, even though it was building towards having a fleet of ten Kilo or Sindhughosh class boats at the time. Also disqualified from the process was Kockums, due to the ongoing effects of the Bofors scandal and the reluctance to become involved with Sweden.

Thus the Indian Navy found itself limited to one candidate for the Project 75 programme--Scorpene. Talks commenced with DCN on the submarine acquisition, which in 1998 was focussed on India taking two submarines directly from France and then assembling two submarines from kits at MDL in Mumbai. After the Kargil conflict between India and Pakistan in 1999, defence spending received a new priority in India and the Indian Navy was able to expand its Project 75 submarine requirement to six boats. Negotiations then continued with DCN, with Thales entering the picture as the DCN/Thales joint venture Armaris came into being.

The Indian aim was the acquisition of six Scorpene class submarines, associated systems and weapons, plus the transfer of technology to allow the six boats to be built at MDL in Mumbai. The only obstacle for DCN and Armaris to surmount was the complicated nature of the Indian defence procurement bureaucracy and the intensely political nature of any major defence programme in India, all of which translates into any contract negotiations taking an immense amount of time. It might have been expected that with Scorpene as the only candidate for the Project 75 programme matters might have sped up. However, even though India had indicated that the Scorpene was the preferred choice, completing negotiations proved to be a time consuming process.

Time dragged on and although the Indian Navy thought that it might be able to obtain sanction for the Scorpene contract in 2003 it was disappointed, and any hopes for a solution in early 2004 were dashed by the fact that national elections had been called. The elections of May 2004 brought a Congress Party-led coalition to power and the new administration immediately undertook to investigate the procurement decisions and processes of the previous administration. Seizing a potential opportunity, other boat manufacturers sought to interest the new Indian government in their wares as an alternative to the Scorpene.

Russia offered the Rubin Amur-1650 design, known as the Project 677 Lada class in the version being built for the Russian Navy. The Amur version offered to India was lengthened and featured provision for eight Brahmos cruise missiles, manufactured by a joint venture of NPO Mashinostroyenia of Russia and the DRDO in India. The Russian proposal also offered for the modified submarines to be built by Indian company Larsen & Toubro at Hazira in India. This Russian offering gained significant momentum in India, but in the background HDW had started to emerge and consideration was being given to looking at the Type 214.

A Decision Made

In the event neither the Russian nor the German proposal was able to dislodge the Scorpene, although it would be fair to assume that they added further delays to the decision-making process. Finally on 12 September 2005, the Indian Prime Minister Manmohan Singh confirmed to French President Jacques Chirac that India would order six Scorpene submarines in a contract with an estimated total value of $ three billion. The contract includes the transfer of technology to allow the six submarines to be built at Mazagon Docks, the provision of subsystem and weapons, such as the MBDA SM-39 Exocet, and Indian sources indicate that there is an option for a further six submarines to be built in India.

DCN and Navantia will act as the prime contractors, while Armaris will act as the prime on the technology transfer to India and work with Mazagon Docks in Mumbai. The Indian Navy expects the six boats to be delivered at a rate of one per year from 2009 to 2015. Thales has noted that its proportion of the value of the Indian Scorpene contract amounts to 600 million [euro] ($ 732 million), which also includes the supply of subsystems for the UDS International (another DCN/Thales joint venture) Subtics integrated command system, underwater sensors, communications systems, optronics and electronic warfare equipment.

With the signature of the Scorpene contract, the Indian Navy is on the way to reaching its aim of 24 submarines. Currently its submarine assets consist of two elderly Foxtrot class submarines, one of which, the INS Vagir, has recently completed a refit at the Hindustan Shipyard at Vizag, India. These elderly boats have limited utility for training but cannot be considered as that viable operationally and they should be retired within the next few years. That leaves the Indian Navy with the four Type 209/1500 Shishumar class boats--the first two German-built boats were commissioned in 1986 and the two Indian assembled examples were commissioned in 1992 and 1994. This ought to indicate a replacement for at least the first two Type 209 class submarines would be required from 2011 onwards, although it is highly likely that they will serve long beyond this date.

The Indian Navy submarine class with the most members in service is the Kilo or Sindhughosh class, nine of these were commissioned between April 1986 and December 1997 with the tenth and last boat being commissioned in July 2000. The Kilo class boats are being gradually upgraded, with the work being done at the Zvyozdochka shipyard in Sverodvinsk, Russia. This upgrade/refit includes the installation of a new sonar suite, weapon control system and the Novator 3M54E Club-S anti-ship cruise missile (ASCM) to provide extended-range attack options; thus far four submarines have been upgraded. Work should soon commence of upgrading unit five and unit six of the Indian Kilo class boats in Russia, but it has been decided that unit seven will be upgraded at the Hindustan Shipyard in India with the assistance of Zvyozdochka. This upgrade will differ from those of the previous boats in that the Indian designed and developed Panchendriya sonar system will be fitted.

Nuclear Options

Taking into account the stated Indian Navy aim of a 24-strong SSK fleet, the Scorpene acquisition will not meet their needs. By the time the first Scorpene boat becomes operational, the existing Foxtrot class ought to have been retired leaving only four Type 209 and ten Kilo class boats. By the time the last Scorpene is delivered in 2015, the first two Type 209s will have been in service 29-years and the first three Kilo class boats will have amassed between 28 and 29-years of service. Hence there is great logic in taking up the option for an additional six Scorpene and selecting another SSK design to be built at a different shipyard in India.

Conventional submarines are not the only item on the Indian Navy agenda; they are waiting patiently for an indigenous nuclear attack submarine (SSN) programme to bear fruit. For more than 15 years, the Indians have been working on an SSN programme known as the Advanced Technology Vehicle (ATV), but making it a reality has proven far more difficult than anticipated. The Indian Navy leased a Soviet Charlie-I class SSN, INS Chakra (K 43), between 1988 and 1991 to provide operational experience, but they anticipated the ATV arriving not too long afterwards. Misjudging the complexity of SSN technology is not an Indian phenomenon; Brazil had SSN ambitions of its own for many years until the size of the task frightened them off. As far as India is concerned work on the ATV continues at the Ship Building Facility at Vishakpatnam, with help allegedly having been received from Russia on design and propulsion issues.

No concrete schedule on when the design will be frozen, the start of building, launch, testing and commissioning has been set. This accounts for the continuing rumours that the Indian Navy is looking to lease an Akula class SSN from the Russian Navy from 2008 onwards to develop an SSN skill base.

Outside of the traditional nuclear submarine builders, only China has had success in this field, although it has taken years to finally obtain satisfactory results. China started building the first Type 091 Hart class SSN in 1967, but it was not completed until 1974; and then four more units were built through to 1987. Performance was disappointing, it took until the mid-1980s to achieve some operational capability and then the first two Han class went in for a major refit from which they did not emerge until the mid-1990s. Then the next three boats went in for a refit and they emerged in 2000. The People's Liberation Army Navy is currently being a bit more adventurous with the operations of its Type 091 SSN fleet, but in reality they are awaiting the arrival of the next generation Type 093 design.

Work on the Type 093 commenced in the late 1980s, but the Chinese experienced problems in terms of propulsion, noise, radiation shielding and sensors; similar to those that afflicted the Type 091. Fortunately, the close defence relationship with Russia allowed them to achieve critical assistance in resolving these problems and allowed the Chinese to develop an SSN with a significantly larger displacement than the Type 091 and far more capability. The first Type 093 is due to enter service this year and the eventual requirement is estimated to be for between six and eight.

China has also developed an SSBN capability. The first effort was the Type 092 Xia class, which was launched in 1981 and entered service in 1983. The problems encountered were similar to those of the Type 091 SSN; with the additional factor that there were problems with the JL-1 ballistic missiles, which persistently failed on test. The first successful firing from the Type 092 finally took place in 1988. It was decided to deal with the problems of the submarine by putting it in for refit and modernisation in 1995, a process that was eventually completed in 2001. In parallel with this, a modified JL-1A missile was developed and successfully integrated with the Type 092. Building on the less than stellar legacy of the Type 092 was a priority programme for the navy and a successor in the form of the Type 094 has become a reality. In July 2004, US naval intelligence discovered that the first Type 094 had been launched and was being outfitted. The JL-2 missile for the Type 094,16 of which will be carried, has been in test since 2002 and is expected to be ready to allow the complete Type 094/JL-2 combination to achieve an initial operational capability between 2008 and 2010.

Chinese Conventional

As with their nuclear counterparts, Chinese SSK designs have had their problems. SSK building in China started in the late 1950s when the Soviet Union transferred the technology for the Project 613 class design. Known in Chinese service as the Type 033, or Romeo class, the first unit was eventually launched in 1965 and production finally ceased in 1987, with more than 80 having been built. The successor was the Type 035 Ming class, which was designed at the 701 Shipbuilding Institute and built at the Wuhan Shipyard. Only three units of the original Ming class were built between 1969 and 1979, at which point an improved version was developed with twelve units being built between 1988 and 1995. The Ming was due to be replaced by the Type 039 Song class, but once again there were problems and so it was decided to produce a further modification of the Ming class in the Type 035G version, with six units being produced between 1997 and 2000.

The Peoples' Liberation Army Navy found a solution to its SSK difficulties by turning to Russia for submarines, and in 1996 ordered two Project 877EKM Kilo class boats, which were delivered in 1998. The Navy then placed an order for two Project 636 Kilos, which were delivered in 2000. Apart from giving it a credible SSK capability the Kilo class was highly instructive for Chinese design institutes and shipyards and the Russian design would inspire the next generation of Chinese SSK designs.

The problems with the Type 039 Song class led to a decision to build the modified Type 035G Ming class and contributed to the decision to order the Kilo class submarines from Russia. The Type 039 was designed by the 701 Institute at Wuhan and built at the Wuhan Shipyard, with the first unit being launched on 25 May 1994. It took until 1998 for the boat to be commissioned and even then the Navy was dissatisfied with its performance. Notably the Type 039 incorporated foreign technology; its diesel engines are based on an MTU design manufactured under license in China. After modifying the design, the first 'amended' Type 039 was commissioned in 2001 and Wuhan then built three more. The Jiangnan Shipyard in Shanghai has also built two modified Type 039 Song class and production continues at both sites.

In spite of improvements in indigenous programmes, in 2002 the Navy decided to order a new batch of eight Project 636 Kilo class submarines from Russia.These Kilos will be equipped with the Novator 3M54E Club-S anti-ship cruise missile and it is anticipated that the four earlier Kilos in service will receive this capability during refit. The first of these left St. Petersburg for China in December 2004, with the third unit being delivered in August of this year. At this rate all of this second batch ought to be in service by the end of 2006.

The modified Type 39 Song class and the Kilo class boats are not the end of the story as far as SSK programmes in China are concerned. In 2001 the 701 Institute embarked on a new SSK design and development programme for the new Yuan class, obviously influenced by the Kilo class and through knowledge gained in the Song class modernisation programme. It could even be possible that this new SSK class incorporates the indigenous AIP system that the Chinese have been working on. The first Yuan class was launched at Wuhan on 31 May 2004, with a second boat launched in December. It would seem that the future of the Chinese SSK force is based on the Russian Kilo class and the indigenous modified Type 039 Song and Yuan classes. Although it is understood that the Chinese Navy is extremely interested in the new Russian Project 677 SSK (see below) and that initial discussions on an acquisition programme have taken place.

A New Contender From Russia

In the Indian and Chinese navies, Russian Kilo class boats and submarine design expertise play a fundamental role. Earlier this year at the International Maritime Defence Show held in St. Petersburg, Russia, Rubin, the design bureau of the Kilo class, celebrated 25 years of the Kilo programme. By the end of 2005, 53 Project 877, Project 877EKM and Project 636 Kilo class (or the Russian Varshavyanka) will have been built, with 29 submarines exported (China is the lead export customer with twelve, followed by India with ten). Following on from this success is the task of the new Project 677 SSK, known as the Lada class to Nato and given the Amur-1650 export designation by Russia.

Designed by Rubin, St. Petersburg, the first Project 677 class SSK was launched at the Admiralty Shipyard in St. Petersburg on 26 October 2004. The St. Petersburg has successfully completed its state testing programme and has now entered service with the Russian Navy. In total the Russian Navy has a requirement for up to 40 Project 677 class submarines. Compared to the Kilo, the Project 677 has a smaller hull form, features extensive automation features and a reduced crew, higher underwater speed and reduced noise characteristics. As stated above, China has already shown interest in the Project 677 or its Amur-1650 export derivative and Indian interest in the submarine should not be ruled out.