Portugal seeks proposals for new submarine

Sea Power, Apr 2003

The Portuguese Government has announced that it is seeking new proposals for its submarine program.

Portugal, which is strapped for cash, announced that it is reducing its purchase from three to two submarines in order to realize savings but now also is looking for additional benefits not included in the last offers. Proposals are expected to include better prices for new submarines and economic benefits, as well as new a new demand for used vessels to satisfy the Navy's subsurface requirements as the new boats would now be commissioned well after the present submarines are to scheduled to be decommissioned.

The two prospective suppliers, the German Submarine Consortium and DCN International, responded to the initial request for proposals in 1998 andafter being down-selected-submitted their revised bids in summer 2000. A sufficient budget was never appropriated and the offerors have worked strenuously to find a financing solution only to run into elections and a brand new government in April 2002, which took the project back to the financial drawing board and has now reduced the purchase from three to two submarines.

Portugal has begun a serious reappraisal of the mission requirements of its Navy, with the primary objective now being identified as the protection of the economic exclusion zone (EEZ). This transition will accent the need for more offshore patrol vessels (OPVs) and fewer surface combatants and submarines. Perhaps most importantly, the government has recognized that the cost of new ships exceeds its naval budget and that it will be acquiring ships from the used ship market.

DCN International initially offered three Scorpene submarines for $1.89 billion and the German offer was for two Type 214 submarines for approximately $2.25 billion, with both parties offering economic incentives. With Portugal's worsening economic situation, in which the nation is now facing a 4.1 percent of GDP deficit ($6.6 billion), the government is attempting to get the best deal it can while modernizing its naval force.