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Daewoo International is bidding to sell Chang Bogo-class submarines, shown above, to Indonesia. / Korea Times |
By Kim Hyun-cheol
Staff Reporter
Following a failed attempt to sell the T-50 supersonic trainer jet to Iraq earlier this year, Korea's attempts to sell submarines are also being torpedoed.
Daewoo International, a Korean trading firm, said Tuesday its bid to export two domestic submarines to Indonesia has not been successful.
The company joined bidding for the deal, estimated to be worth about $1.2 billion, to supply two 1,400-ton diesel-powered Type-209 submarines to the Indonesian Navy. The subs are made by Daewoo Shipbuilding and Marine Engineering.
Three more companies from Russia, Germany and France competed for the deal. But sources said the Indonesian Navy demanded unacceptable terms so Daewoo and the German and French firms dropped out. Only the Russian firm remained, forcing Indonesia to instigate a second round of bidding.
The modified version of the ``Chang Bogo'' class is currently in service in the Korean Navy, which operates nine domestically built submarines designed by Germany's Howaldtswerke-Deutsche Werft.
Daewoo International said technical specifications requested from Jakarta were overly demanding.
Russia is considered its major competitor, since it is backed by well-established political ties with Indonesia and an offer of a $1-billion loan. In another negative sign, the incumbent Indonesian defense minister is said to be pro-Russian.
In the end, the second bid is likely to be a duel between Korea and Russia, according to informed officials, with the other two bidding countries skeptical about Jakarta's request on price cuts.
This is not the first time of the year that Korea has staggered in such a bid. In February, the Korea Aerospace Industries, Korea's only aerospace firm, lost in a competition to supply next-generation military jet trainers to the United Arab Emirates. The Middle Eastern country selected the M-346 by Italy's Alenia Aermacchi as the preferred bidder in the $1.3 billion deal.
Daewoo is planning to enter the second round of bidding for the subs, hoping to take advantage of ties cultivated since the establishment of its Indonesian unit in 1976.
Some say that the sub sale is not worth the effort.
``The government seems to believe the defense industry can be a lucrative field, but that's a myth when the whole world is absorbed in contracting related budgets,'' military critic Kim Seong-jeon said.
``The T-50 and the Chang Bogo, the problem is just the same. As long as we don't have enough core technologies in the business in comparison with many other advanced countries, exporting them is no better than just exporting a workforce.''
hckim@koreatimes.co.kr
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