Germany pays €170m advance on submarines for Israel

The payment will be transferred to HDW shipyards in Baltic port of Kiel in a few days.

The German government will pay a €170 million advance payment to begin construction of two Dolphin II class submarines for the Israel Navy. The payment will be transferred to Howaldtswerke Deutsche Werft AG (HDW) shipyards in the Baltic port of Kiel in a few days.

When the advance is paid, the agreement between the Israeli and German governments for construction of the two submarines for €2 billion will come into effect. Under the agreement, Germany will finance one-third of the deal, and Israel will pay the rest over a ten-year period. This means that half the amount will be paid to Germany long after the submarines enter service. The first submarine will be delivered in six years, and the second a year later.

The two Dolphin II class submarines are improved versions of the three Dolphin I class submarines, which are already in service with the Israel Navy. The Dolphin II is ten meters longer and 500 tons heavier than the Dolphin I, and will displace 2,000 tons. The changes are designed to extend consider the length of time the Dolphin II can stay underwater.

The Dolphin II’s armament will include long-range missiles. Reports in the foreign press, which have not been confirmed by Israel, claim that the Israel Navy’s submarines are part of Israel’s strategic array, and, if necessary, can deliver a pre-emptive strike in the event of a threatened nuclear attack on Israel.

In the late 1990s, the Israel Navy put in service three Dolphin I submarines, which HDW built over the preceding decade. However, the Navy concluded that, on the basis of threat scenarios and outlines of a future war, it needed two more submarines. The decision was based on the working assumption that at least one submarine would always be undergoing maintenance and repair, while the others would defend the country’s seaboard from Syria in the north to Egypt in the south.

Three years ago, the Ministry of Defense entered into negotiations with Germany’s Ministry of Defense to examine the possibility of building two more submarines. The main clauses in the agreement were completed a few months ago. The two countries agreed, among other things, that all the submarines’ combat and combat support systems considered force multipliers would be built by Israeli defense contractors. The cost of the Israeli-built systems will amount to 15-20% of the submarines’ total cost.

Published by Globes [online], Israel business news - www.globes.co.il - on July 18, 2006

© Copyright of Globes Publisher Itonut (1983) Ltd. 2006

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