July 16, 2015

Thailand Puzzling Whether to Buy Chinese Submarines

A model of a Chinese S20 (or S-20) submarine at an arms trade show. Note that it is being marketed by "CSOC" - which is the China Shipbuilding & Offshore international Co (CSOC) Ltd.
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A Chinese Type 039A or Type 041 Yuan class submarine - with many Russian Kilo characteristics. Thailand has been puzzling whether to buy 3 small version Yuans - called "S-20" or "S-26T".
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For the latest on Thailand's on-again, off-again interest in submarines see Submarine Matters Does Thailand Need Submarines At All? August 12, 2015.

COMMENT

Please connect with my Chinese Yuans for Thailand and Pakistan? June 27, 2015. It looks like I was right (in the June 27 article) in being cautious - I said "China is an unconfirmed choice" and "If China is finally chosen".

The whole process of Thailand selecting Chinese submarines looked strange from the beginning. The "process" being a mere Naval Committee deciding on Chinese submarines and then publicising the decision before the Thai Cabinet had signed off on it. 


It all looks like a face saving formula where the Thai military government only indirectly proposed submarines. But high defence spending was/is unpopular with sections of the public. Other competing spending priorities, such as reformed healthcare, were raised. 

Perhaps only two Chinese submarines, or other subs, might be bought at some point in the future.

ARTICLE

The Financial Express, July 16, 2015 reports http://www.financialexpress.com/article/null/thailand-puts-1bn-chinese-submarines-purchase-on-hold/101548/:

Thailand puts $1bn Chinese submarines purchase on hold

Thailand has put on hold the purchase of submarines from China, the Thai defence minister said on Wednesday, raising questions about its commitment to acquiring its first such vessels. Defence Minister Prawit Wongsuwan said this month the navy had approved a 36 billion baht ($1.06 billion) plan to buy three submarines from China.
Thailand, a staunch U.S. ally for decades, has stepped up engagement with China as China increases its influence in the region with loans and aid for infrastructure, and as a 2014 coup in Thailand strained Thai-U.S. relations.
Prawit, known to be a strong backer of the plan to get submarines, told reporters the acquisition was on hold while the navy re-considered the role of the vessels and their cost. “We will wait for now and not introduce it to the cabinet for approval,” Prawit told reporters. “For now, the navy must inform itself and educate itself on whether the submarines are worth it and how much they will add to the Thai navy.”
Thailand has been considering getting submarines since the 1990s with both Germany and South Korea seen as possible suppliers, though deals have never been concluded. In November, Thailand’s navy chief said he had revived plans to procure submarines.
Officials say Thailand’s quest for submarines makes sense strategically and could help ensure freedom of navigation in the Gulf of Thailand if territorial disputes in the energy-rich South China Sea blow up. Vietnam has taken possession of three Russian-built Kilo-attack submarines and has three more on order. Singapore, which has four second-hand submarines, has ordered two from Germany’s ThyssenKrupp Marine Systems . Indonesia has ordered three from South Korea’s Daewoo Shipbuilding.
China this year surpassed Germany, France and Britain to become the world’s third-largest arms exporter, according to the Stockholm International Peace Research Institute think-tank. China was the first major power to acknowledge Thailand’s ruling junta following a May 2014 military coup."

Pete

13 comments:

Nicky said...

Hi Pete,
I suspect that Thailand maybe looking for something cheaper and more reliable. I think after seeing Vietnam buy improved Kilo class SSK's and seeing the price tag. I suspect Thailand wants Kilo class SSK's or they are trying to find away to get South Korean submarines. I just have to wonder, How much is the Yuan class Submarine?

Peter Coates said...

Hi Nicky

Re "How much is the Yuan class Submarine?"

Many reasons why there is no answer.

The domestic costs of China building a Yuan for itself are basically unquantifiable even if the NSA and CIA had a lot of data. There are many sunk develpment and program costs that distort unit prices.

No Yuan for a foreign customer has been built (to my knowledge) and no Yuan has been sold overseas - so no-one knows - not even Chinese defence accountants.

The are no standard prices for submarine customers because every customer has different needs, specs, currencies and different risks and political benefits. "Off-the-shelf" doesn't really exist.

China is notionally charging US$335 million per Yuan, A-20 or A-26T (with extra-generous terms of training and 8 years support and spare parts). The not yet existing subs being offered to Thailand may be sufficiently different from a Chinese Yuan not to be a Yuan. If China were selling to less politically favoured countries, all with different requirements/specs China would charge different prices.

Regards

Pete

Nicky said...

HI Pete,
That's why I think were seeing some hesitation from Thailand on China's Deal.

Anonymous said...

Too much vaporware,if not all vaporware, a very risky bet on a 1st in a new class? Would not want to hand one's admiral career (or many careers) on such a "written all over" fiasco, regardless of kickbacks

MHalblaub said...

Vaporware submarine, sounds like Collins-class.

The Collins-class still proviedes kickbacks called ASC employment.

Can someone imagine a Chinese operation manual first translated to English and then to Thai?

Nicky said...

If Thailand is really concerned about cost, I would think the Type 210(Mod), Type 209 or even the improved Kilo class SSK or Amur/Lada class SSK would be one option.

Peter Coates said...

Hi Anonymous [at July 19, 2015 at 12:14 AM]

Yes the lack of a A-20 or A-26T in existance does present a risk to the possible first (Thai) customers. The Chinese price is so low and terms so generous that China may build Thailand subs that have some low end Romeo/Ming (Type 033) https://en.wikipedia.org/wiki/Romeo-class_submarine#Chinese_Type_033_Romeo-class_and_its_variants features and perhaps fewer higher end Yuan features.

Regards

Pete

Peter Coates said...

Hi MHalblaub

Yes A-20/A-26T presents some buyer risks.

Don't know if China would translate the Yuan Users Manual into English.

German 210s or German or South Korean 209s might win after all.

Regards

Pete

Peter Coates said...

Hi Nicky [at July 19, 2015 at 6:03 AM]

I think Thailand should avoid buying Chinese or Russian subs because political influence from those countries would come with overly cheap prices. Low prices also wouldn't buy AIP development for any Amyr/Ladas.

Regards

Pete

Nicky said...

Hi Pete,
When it comes to cost, I think the Improved Kilo class SSK is much more attractive for Thailand. Look at how much the going cost for an improved kilo class SSK. At $200 to 250 million dollars each, they could have gotten 2 to 3 kilo's with transfer of technology as well.

Though if Thailand went for Germany, I would think the Type 209 would be one option and the other would be the Type 214, which comes in at $330 Million dollars each. The other option would be South Korea's Chang Bogo class Submarines or buy Type 214's from South Korea.

Either way, I think China should have been their last resort and should have made a pitch for Russian or German SSK's.

MHalblaub said...

There is another reason against China. China has no experience with a real submarine war like Russia or Germany.

Surfacing a submarine in the middle of a carrier group is one thing. Another thing is to sink the ships and get away with it.

Peter Coates said...

Hi Nicky

Kilos are too large and probably more expensive - Kilos weigh more tonnes.

http://www.thanhniennews.com/society/vietnams-2nd-russianmade-sub-completes-sea-trials-1963.html Vietnam charged US$2 billion to buy six Kilo-class...in December 2009.

S0 US$333 million per Kilo 6 years ago - probably more like US$400 million per Kilo now.

Two German 1,000 tonne (surfaced) Type 201mods the best buy for Thai.

Regards

Pete

Peter Coates said...

Hi MHalblaub [July 20, 2015 at 8:12 PM]

True China has no submarine experience and China hasn't won a sea battle against Japan or European countries since before the Opium Wars 1839.

Also Russia (shipyard in Ukraine) has never used or won with aircraft carriers - even though it sold one each to India and China.

Regards

Pete