Hurdles Await Taiwan Efforts To Move Forward on Submarines
By WENDELL MINNICK
TAIPEI — Political and industrial complications, especially increasing resistance by China, are building obstacles in Taiwan’s path to finally procuring eight diesel submarines offered by U.S. President George W. Bush in 2001.
Taiwan has been taking steps toward the purchase for nine months. Last June, after years of wrangling, the legislature approved $61.5 million for the first year of the three year, $360 million Phase 1, the submarine design feasibility study. Construction, or Phase 2, is estimated to require about $10 billion.
In January, Taiwan submitted a formal letter of request (LOR) to the U.S. Navy’s International Programs Office for a letter of offer and acceptance (LOA) for designing and building eight diesel sub marines. A U.S. Navy team visited Taiwan the first week of March to discuss details of the sub program with Taiwan officials.
“The exchange of a LOR and LOA represents a government-to-government contract and would cover Phase 1 of the submarine program — the end result being construction-ready architectural drawings,” a former U.S. defense source said.
Since no United States firm has built a non-nuclear submarine in decades, the success of Phase 1 rests on Taiwan’s ability to get plans from another country, such as France, Germany or Spain.
“This is deemed as unlikely, as China has applied considerable political pressure to prevent any European arms sales, including designs, to Taiwan. Following the sale of two submarines to Taiwan in the 1980s by the Netherlands, China nearly broke diplomatic relations with Amsterdam,” the source said.
The Taiwan Navy has four submarines: the two Dutch-built submarines from the 1980s and two Guppy-class submarines built during World War II.
The Guppies are the oldest operational submarines in the world and have come to represent Taiwan’s procurement anguish. Though Taiwan has obtained vessels from France and the Netherlands, today they only provide components and upgrades to maintain ships still under contract. Pressure from Beijing has cut Taiwan’s lifeline with every country except the United States.
“We are impossibly dependent on U.S. support. The U.S. is the only dinghy left in the sea to save us from drowning,” a Taiwan source said.
Congress should be notified around June, the U.S. source said. When the 50-day notification process is completed, the LOA will be sent to Taiwan for countersignature around August. However, there might be hesitation in the Pentagon about sending the congressional notification in June, with Bush scheduled to attend the opening ceremony of the Beijing Olympics on Aug. 8. “It is possible that U.S. National Security Council Staff and the U.S. State Department could call for delaying the notification until the conclusion of the Olympics on Aug. 24,” the source said.
After Taiwan deposits funding in the Foreign Military Sales account in September, the U.S. Navy will send out a request for proposals for design and construction. Industry will have about six months to submit proposals, after which the U.S. Navy will take three months to select the prime contractor, with an estimated announcement in mid-2009.
The nightmare began almost immediately after Bush announced the release of submarines in April 2001. That was just a year after Taiwan’s Beijing-friendly Chinese Nationalist Party (KMT) had lost its first presidential election to the independence-minded Democratic Progressive Party (DPP). For six years, embittered KMT legislators blocked defense budgets to weaken the new DPP administration, straining Taiwan-U.S. relations. Taiwan’s presidential election is scheduled for March 22, when the KMT is expected to retake the presidency. Though many are optimistic the submarine purchase will now go through, much has changed since Bush’s 2001 offer. Bureaucratic, political, economic and technical challenges make the sub program increasingly more difficult.
“The situation is more complicated,” a Taiwan source said. “The interaction was originally between Taiwan and the U.S., but now China has entered the picture. The Chinese element has gone through very sensitive channels in the U.S. to make it clear that Beijing will not tolerate the sale of submarines to Taiwan.” Despite China’s growing influence in Washington, the U.S. source said, “there’s strong reason to believe that the Bush administration is committed to the successful execution of this program. As in any major program, however, obstacles exist that could present challenges.”
FMS vs. DCS
Beyond political problems, there is the difficulty of finding a builder capable and willing to build a submarine for Taiwan. U.S. policy gives Taiwan no option besides Foreign Military Sales (FMS) and no role for Taiwan industry in the manufacturing, the U.S. source said.
“In other words, if Taiwan decided someday that the FMS channel isn’t working, it could not decide to go another route and work directly with U.S. industry in a cooperative program. The longer this policy remains on the books, the more ingrained it will become.” The original U.S. Navy position in 2001 intended the program to go through direct commercial sales channels.
“It’s in writing and in the files. In other words, U.S. Navy policy supported it, but at an arm’s length. The goal was to keep final assembly out of U.S. shipyards. Hull sections could be done in Mississippi, Connecticut or Rhode Island, and then shipped to Taiwan for assembly,” the U.S. source said.
The United States has not built a diesel submarine since the Barbel-class in 1959 and has been accused of attempting to kill the Taiwan sub program in order to preserve the so-called nuclear Navy, fearing the renewal of a diesel submarine build capability within U.S. industry.
However, the Taiwan source argues that this offers the United States a “great chance to enter the international market for conventional submarines with its own design fully paid for by Taiwan. Countries not able to export submarines from Europe would be interested in a U.S. diesel submarine program.” Taiwan’s state-owned China Shipbuilding Corp. (CSBC) has made a bid, largely ignored by the Taiwan Navy and U.S. government, to build or co-build the submarines.
“These boats are not a problem to build. We have the capabilities and brainpower to accomplish this program. What we need is U.S. support for this project,” the Taiwan source said.
In 2001, Taiwan revealed the Hidden Dragon Program, an effort to prove CSBC could manufacture a single pressure hull, and then in 2003 a cross-ministerial committee was formed to promote the local build of submarines, dubbed the Indigenous Defense Submarine (IDS). Though both programs are largely dead, “the IDS could be resurrected if combined with a direct commercial sale. The design team is still there ready to go,” the source said.
CSBC created a basic design based on two submarines, the Argentinean TR-1700 and the Norwegian Ula-class Type 210.
“If we started today, we could deliver our first boat in 42 months provided we were given the money and the support. A home-built submarine would be 15 to 20 percent cheaper if it is done via a commercial sale and not FMS,” the source said.
CSBC has built hundreds of commercial cargo ships and oil tankers, along with military vessels, including eight Perry-class frigates built between 1990 and 2004. It currently is building 30 stealthy 170-ton Kuang Hua-6 guided-missile patrol boats.
“Given the success of other countries with submarine construction with foreign designs, the inclusion of CSBC in the project is a must. CSBC’s premises are well-suited to arrange a compact submarine assembly area with a little investment of $50 million,” the Taiwan source said.