Park was optimistic about the future of the program, suggesting that progress had been made in negotiations.
“Discussions with Indonesia have advanced quite nicely…Delivery will probably begin by the first half of next year.”
Park Doo-seon, President of DSME
DSME beat out Russian rivals for the delivery of three additional submarines to the Indonesian Navy. The deal, signed in 2019 and worth over $1 billion, will see the company deliver three modified Type 209 submarines. Indonesia already operates three vessels of the same class delivered as part of an earlier contract with DSME signed in 2011.
However, Indonesia has failed to provide a letter of credit (L/C) this time round. An L/C is a payment mechanism issued by a bank that provides an economic guarantee to an exporting company. Without it, DSME cannot begin delivery of the submarines and will face a significant financial loss due to resources that have already been allocated to the program.
Park said that he was not worried about the delayed L/C.
“Indonesia has [postponed issuing L/Cs] before. They did not provide an L/C for over a year for one of our contracts, but then ended up eventually fast-tracking the program anyways. We expect the 50th anniversary of the establishment of diplomatic relations between our two nations next year to positively affect talks.”
Park Doo-seon, President of DSME
Park also revealed that DSME was in talks with the Philippines regarding the potential acquisition of submarines.
“The Philippine Navy has never operated submarines before. We are currently in ‘meaningful’ discussion with them [regarding a potential order]. We plan on showing the Philippine government that signing a contract with us will mean more than simply buying new submarines. We will provide opportunities for technology transfers, ‘facility provision’, training, and maintenance.” Park added.
According to Park, DSME also plans on entering the Royal Thai Navy’s competition for a second frigate. The company delivered HTMS Bhumibol Adulyadej (FFG 471), which was commissioned in 2019.
