Hurdles Await Taiwan Efforts To Move Forward on Submarines

Defense News

03/17/08

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.

Complications

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.