State Secretary: Speeding up tender for Dutch submarines not an option
The decision on who will build the new Dutch submarines will not be taken before 2022. Despite government parties urging to speed up the process, particularly with the corona crisis in mind, the Dutch State Secretary for Defence Barbara Visser said in a debate that setting the requirements simply takes too much time.
Originally, the contract for the Dutch submarines was to be signed in 2021, with the first boat to be operational in 2027. However, because the government introduced the Defence Industry Strategy (DIS), extra studies were conducted, which resulted in a year’s delay. Defence projects seem to be characterised by delays over the past years, although this is improving. As Visser pointed out in the debate on Thursday 25 June: ‘In 2016, half of our projects suffered delays. In 2019, this was about a third. I am still not happy with this, but some delays, such as for new clothing, have also resulted in improved quality.’
State Secretary Barbara Visser during the debate on 25 June.
The DIS studies included one by TNO, which investigated whether submarines are still of use or whether other naval capabilities could take over their tasks. The conclusion of this research was that submarines are still needed as they are the only asset capable of combining tasks such fire power and gathering intelligence.
When asked about the so-called ‘transparent ocean’ in which new technologies would be capable of detecting submarines, the State Secretary said this is not imminent and she said that the TNO research showed the submarine capacity will continue to be needed for at least the next thirty years.
Other research conducted as part of the DIS concerned a cost-effectiveness analysis, research into international cooperation and research into the tender parties that have come forward. Following these studies and their conclusions, the State Secretary said there was ‘no clear winner’ among the possible submarine builders, which is why the government ‘had to continue with the tendering process involving three parties.’
No tender parties to be cut as yet
The three parties still in the race are German ThyssenKrupp, Swedish Saab together with Dutch subcontractor Damen Shipyards and French Naval Group together with Dutch subcontractor Royal IHC. Several government parties, including CDA, VVD and SGP, have called on the State Secretary to just choose for Saab/Damen as according to these parties, this will maximise Dutch involvement and may speed up the process. In addition, in light of the corona crisis, it would be very welcome if Dutch shipyards are kept at work with government orders, state the parties.
According to Visser, speeding up when choosing one builder would not be the case as the list of requirements still has to be made and because the three criteria for the tender are: ‘the best boat, the best price and as much Dutch involvement as possible. Right now, we are in talks with the three foreign shipyards. We do not yet know what their agreements with their subcontractors are or how they will maximise Dutch content precisely. This will be part of the next phase. By excluding two parties early on in the process, we may not get the best boat for the best price. We also want to be able to compare the offers on the table.’
The State Secretary stresses a tender process was chosen, because the Netherlands is lacking its own submarine building capability. ‘The Dutch industry simply lacks the knowledge to build submarines on its own. Should there have been a company capable of doing so, we might have gone straight to them, as we did for the M frigates, instead of opting for a tender. But we don’t, so our focus is on strategic autonomy when it comes to preservation and maintenance.’
‘What we want is that our knowledge institutes and industry are closely involved from the start, that is design and construction, so that we can conduct our own upgrades, maintenance and preservation, as we have done with our Walrus class. We want to have the flexibility to be able to make adjustments,’ explains Visser.
State aid considerations
Member of Dutch political party VVD André Bosman also asked the State Secretary about the state aid recently awarded to shipbuilder Royal IHC and whether this gives the Naval/IHC consortium an advantage in the tender. Visser emphasises that ‘the rescue of IHC is a separate matter. Of course, state aid at any of the three parties will be something that will be considered during the tender process. Our focus is a level playing field and the three criteria “best boat, best price and Dutch involvement” are the key factors.’
The next phase will see a list of requirements being created which will include go/no go criteria. In addition, further negotiations will take place with the three parties still vying for the order. Visser: ‘We want to be sure the contract is awarded in 2022, which will be tight, but since the Walrus class will really be at the end of its life in 2028, that is when the first boat needs to be ready.’ The new submarines are said to cost at least 2.5 billion euros.
Picture (top): The current Walrus class submarines are being upgraded as part of a life extension programme, but by 2028 they will have reached their end-of-life (by Dutch Ministry of Defence).