Indonesia Enters Final Stages of Negotiations for Another Three-Submarine Contract with DSME

15 Februari 2019

Indonesia is close to signing a contract for three more Type 209 submarines with DSME. Jakarta has been studying several vessel types for the requirement, but is now inclined towards the South Korean option given commonality with earlier boats (photo : Korps Hiu Kencana)

Indonesian officials have entered the final stages of negotiations for a follow-on order of three Type 209/1400 diesel-electric submarines with South Korean company Daewoo Shipbuilding and Marine Engineering (DSME), and an agreement is expected in the next few months.

Industry sources, who have been updating Jane's on the progress of these negotiations since early January 2019, said that if all goes well a formal contract for the boats may even materialise by the end of February or early March.

However, there are several decisions yet to be made, and these mainly pertain to workshare arrangements that can be undertaken for each vessel, the sources confirmed.

Once it materialises, the contract, which includes a support and training package across all three submarines, is expected to be worth about USD1.2 billion.

Jakarta signed a USD1.1 billion deal for three Type 209/1400 submarines with DSME in December 2011. Two submarines under this contract have been delivered, while a third is awaiting launch at PT PAL's premises in Surabaya. The first submarine was commissioned in August 2017 as KRI Nagapasa (403).

As indicated in initial points of discussion seen in a document of the meetings provided to Jane's, the first boat in the follow-on contract, which will be the fourth vessel in Indonesia's Nagapasa class overall, will be assembled at DSME's facilities in Okpo, South Korea.

However, Indonesia has proposed that two of this boat's six modules be constructed by PT PAL in Surabaya, while DSME will build the remaining four in South Korea. Once ready, the Indonesian-built modules will be shipped to Okpo for assembly.

(Jane's)