U-214 SSK problems

[Sea Toby]

if i remember well HDW has already received the 80% of the total amount for the submarines...because Greece has prepayed for them

There is a reason why shipyards have steel cutting ceremonies, keel laying ceremonies, christening ceremonies, and commissioning ceremonies for ships. That's when they receive payments....

Especially during this credit crunch, and with ships costing hundreds of millions of dollars, without such payments shipyards would go broke building a ship before delivery. Its pay as they build...

 

[kato]

And unless customer navies want to start paying minimum 30% excess to pay off interest for taking out a credit this is gonna stay the financing mode too...

Well, anyway, the contract is in arbitration. That means that either Greece pays a certain sum to buy the submarines, or HDW pays back the sum received from Greece so far and sells them to another customer. At current - risen - market price, they could even make a small profit from this, or use the subs at a reduced price as an inroad into another competition *cough*Saudi Arabia*cough*.

 

[eliaslar]

Something is not so clear in this point. You point Greece as a bad customer but you don't characterize HDW's stance.

Actually, and according to the documents, Greece paid the 80% of the amount (from the 2,1 billions Euros) of the subs when the project was still in papers. So actually Greece financed the project, giving a huge help to HDW.

Part of the agreement was that HDW would buy the shipyards in Greece, paying just a small part of the shipyards true value (another gift to HDW from the then Greek government) and another part was that HDW would upgrade the old subs without Greece have the right not to accept them in case of something goes wrong (!!!!), that means that HDW can deliver (when they will do) a sub not working for an upgraded one and i will have to accept it.

So HDW now want's the rest of the money when they not only haven't officially delivered the first sub (4 years after the date it should have been delivered) but also haven't delivered the subs under upgrade. Not to mention the fact that the shipyards under HDW produce nearly nothing, leaving thousands of workers without work.

Now you will (again) accuse Greece for not accepting the subs all those 4 years, when according to HDW the Papanikolis is ready and without problems, but HDW although having received a great sum of money she didn't even delivered the offsets...very nice, now again you want Greece to pay the rest of the money for what? For nothing?

Not to mention that the Greek state payed 135 million Euros to HDW for the upgraded subs from 2007 till now, money that we didn't have to pay or to say it...another gift.

But it is clear that HDW was very smart, we financed the project and till now HDW sold it to Pakistan, Turkey and Korea. I would like to see if we didn't finance it who would buy it. It looks like HDW is in a great need of money though, or else it wouldn't ask for the money and do some serious job.

PS To tell you the truth i would be happy now if HDW took those damn subs and we were free to buy the French ones, i am sure they would work and we would be happy

 

[kato]

A gift is not a gift if it's a condition of a contract. And yes, of course Greece financed the project. That's how governmental contracts work.

HSY wasn't a gift, but a burden. Take over HSY and save Greek jobs, or you don't get the contract. Because HSY is a loss, and already was one before HDW took it off Greek hands - the Greek government buttered 230 million illegal subsidies (declared illegal by the EU) into HSY in 1997 and 2002. HSY was in a bad enough state that HDW didn't use them to build ships initially, but jointly with Siemens built trains there for the Olympics, while at the same time investing in the yard for 3 years to bring it up to a state where they could use it in its original function.

It's set out in the contract at which point payments occur, and at which point deliveries occur. It's not HDW who is in breach of this contract for the past two years, but the Greek government.

 

[eliaslar]

We are talking about the same shipyards which delivered in 1999 the last of the MEKO frigates and which in 2003 delivered the first of the OSPREY HSY 56A...that's the shipyards it took you 3 years to bring them in a state to built ships....?? If the shipyards where in such a bad state then how all those ships were made till 2005?

We are talking about frigates, gunships, big civilian ships (i could see them while my job was around that place that time), i don't think that the shipyards where in such a bad state.

The fact is that from 2005 and then nothing happens there, except the subs.

 

[turin]

So, basically, eliaslar, you make it appear like HDW is the true perpetrator of misconduct here, not the Greek government. No offense, but "big" surprise...

Lets look at what you wrote:

The Greek government did nothing to "help" HDW. They are a customer, they issue an order and pay for it, HDW is a for-profit organisation, that delivers what has been ordered. Lets look at the facts, shall we? HDW delivered the first boat. On schedule. The Greek turned it down, saying it did not meet requirements. Fair enough. HDW did not fully confirm the extent to which the boat was claimed to be "not operational", however they confirmed that certain issues arose and were corrected.

The Greek line however was very clear from that point on...they subsequently refused to take over any of the boats, even though they never substantiated, why they did so. Now, looking at Greek budget issues of course one might "suggest", that the true reason is in plain sight. Of cause they paid a percentage of what was agreed upon. They would be in complete and total breach of contract, if they did not. What they are looking for is a discount, not a freebie. On a side-note...when the first reports about the technical deficiencies came out, everybody was looking at the Koreans and wondered if they had the same problems. After some initial claims to the contrary it turned out, there was nothing unusual happening there. HDW really does not have a track record of seriously faulty boats. Greece however does have a track record of seriously faulty financial planning.

The whole shipyard thing obviously was not a favour for HDW. Please tell me, why the Greek are handing out favors like that, why would any responsible national government do that? For what? Being nice to the companies? Then why not just accept one faulty boat? Just another favor, is it not? On the other hand, any national government has a substantial interest to increase their own competency at building ships. Thats why so many subs these days are being build not at the developers shipyard, but that of the customer. Whatever the owner details, its still a Greek shipyard, employing Greek workers and generating money, in a potentially substantial way, for the Greek state. And as for that "they built ships before, obviously they are doing fine"...well no offense, but I think there is a slight difference in building subs in contrast to something else. Obviously the Greek were lacking that capacity before or how many indigenous subs did they build before?

 

[eliaslar]

@turin

i don't disagree with what you say. But if Greece is such a bad customer as you say, then why in the Elefsis shipyards (which by the way it's 10kms away from Skaramagas) the Super Vita program is going well and there is no problem? And not only the last two ships (4&5) are nearly delivered, there was another contract for 2 more ships...The contract was signed in May and the ships are under construction. I think VT took the money she needed to do so, i don't know the exact sum of money but if each of the first 5 ships cost 150 mil Euros (from what i know) then we have 300 mil Euros for the last 2 ships...where is the money problem here? Only HDW has a problem?

On the other hand, about the subs, you say that the ships are delivered...to whom? I know from inside that the ships built in Greece didn't do even the Sea Trials, i don't think that HDW needs more money to do so...especially if Pipinos is ready for a long time now...and before the money problem raises. I am not talking about HAT's i am talking about SAT's

Maybe we have something more here, not only money.

 

[sweeneygov]

Ultimately it comes down to the contractual arrangements and who was supposed to pay what and when. Then see if there was any intention by either party to meet those obligations.

What is worrying is what the Hellenic Navy will do now for submarines? Their Type 209s were built in the early 70s and are in dire need of replacement.

With the collapse of these programmes all they can do now is keep the younger ones in service by cannibalising the very old ones. What is the status of the upgraded Type 209?

There is no telling how long the legal dispute will run so Greece may not get much of its money back for a while yet, in the meantime the Hellenic Navy will lose is submarine capability.

Then there is Turkey procuring six new Type 214s...

 

[Firn]

There is no telling how long the legal dispute will run so Greece may not get much of its money back for a while yet, in the meantime the Hellenic Navy will lose is submarine capability.

Then there is Turkey procuring six new Type 214s...

I truly hope that Greece will never have to swallow the full measure of bitter irony...

 

[turin]

@eliaslar:

As far as the separate Super Vitas are concerned, well, I think it really has to do with money primarily. Because from a price-per-unit perspective the VT-contract was the lesser of two evils for the government. I am speculating here, of course, but first thing: you dont mess around with all your contractors at the same time, second thing: you have a look at the one, that really costs you the most for getting the least unit-wise. With the HDW-contract the savings by getting a discount based upon technical deficiencies would be considerably larger. But again, this is speculation on my behalf.

As for the subs built in Greece, I did not specifically write that they were delivered. But as far as reports go (such as this summary: Greece in Default on U-214 Submarine Order ), they are complete or about to be finished and either were or were not accepted by the Greek. The reports are somewhat inaccurate on this one, probably due to the fact that negotiations were very much in motion and their acceptance was based on a positive outcome (as far as the Greek were concerned).

 

[Firn]

Taiwan in talks with Germany over four subs

That would be quite a move. I think that such a deal will have a very rough time getting through. But Taiwan it is one of the very few potential costumers. Four such submarines could be very precious elements in the ROC's strategic puzzle.


Firn

 

[Ananda]

Taiwan in talks with Germany over four subs

That would be quite a move. I think that such a deal will have a very rough time getting through. But Taiwan it is one of the very few potential costumers. Four such submarines could be very precious elements in the ROC's strategic puzzle.


Firn

Uuuuhhh yum,yum,yum...It will be very interesting to see if Merkel will dare at this point stand up against Hu
Seriously though with Present Taiwan administrations couzing up relationship with China, will Taiwan willing to risk infuriating China with Submarines purchase (even somewhow German willing to sell them) ?
Afterall in my reading China seems have this kind of notions, anything that's being sell to Taiwan, they secretly can lived with except Submarines, or Nuke's.

Still on business side, this will be very good opportunity for HDW, they practically can asked whatever pricess..thus covering their losses on the greek fiasco.

 

[Firn]

1) 4 SSK of the quality of the U214 would make every conventional maritime move against the ROC much more difficult.

2) I don't think that Merkel is too much concerned with China's reaction. Keep in mind that she also welcomed the Dalai Lama as the first western head of government. Still it will be a difficult deal to make.

3) So far nothing is ufficial, so we can just speculate. But why shouldn't we?

5) Greek will watching this very closely. IMHO they speculated to get the four SSK with quite some rebate - what will they do if this gets through? Try to find other subs to keep up the arms race against Turkey?

 

[Ananda]

Greek will watching this very closely. IMHO they speculated to get the four SSK with quite some rebate - what will they do if this gets through? Try to find other subs to keep up the arms race against Turkey?

I don't want to take side, but on business side, if the Greek burn their bridges with HDW, don't think they can get better deal with other submarines contractors.
Realistically though now in the market except Scorpene and Gotland, don't think anything (conventional, nuke's not included) ready yet that can match 214 (except 212 off course). Historically though the german seems the one that provide better (financially) deal with the Greece, don't see at this point around the Frenchies will take over on providding beter financial packages on Scorpenes.

Spain S 80 still on development and Lada/Amur...well with Russian themselves still heavily marketing Improved/Advanced Kilo's indicating they're still not quite finish with Lada/Amur development.

 

[turin]

2) I don't think that Merkel is too much concerned with China's reaction. Keep in mind that she also welcomed the Dalai Lama as the first western head of government. Still it will be a difficult deal to make.

The Dalai Lama has been in Germany numerous times in the last years. This was always treated differently, partly because there is considerable bi-partisan support for the Tibet movement in Germany (with supporters speaking in parliament etc). This hardly characterizes a separate/new stance on behalf of Merkel, even though she was indeed the first chancellor to meet him (which was followed by rather limited official backlash on behalf of Beijing), and it is drastically different to supplying weapons, esp. significant ones like SSK, to Taiwan. In fact German-Taiwan relations are almost non-existent and Germany, under any government, has been extremely careful not to disrupt Sino-German relations, which have a very significant economial aspect, in this regard. Germany, with or without Merkel, has nothing to win in this regard, because the whole issue of the Taiwan-question does not really have any mark in public perception.

I do not see any prospect for this kind of deal going through.

 

[the road runner]

deleted

 

[fantasma]

Well, after years of negotiations it seems that the greek goverment has finally reached an agreement with the german side! The first boat "Papanikolis" will be commisioned to Greece and already Greece is looking after a country in order to sell it! The rest three of the class have already been constructed and expecting the final trials before being commisioned and integrated to the greek sub fleet! The last three Papanikolis boats have taken all the improvements applied for the first boat.
The greek shipyards which were under "german" control are now handed over to Abhu Dhabi Mar which might be a subsidiary company of the german one! The deal is said to include also the commitment from the greek side to purchase 2 more 214 subs. The previous plans for the modernization of the 3 subs 209/1200 to a 214 level have been cancelled since the programme has faced many drawbacks and inevitable delays. Only the first has been commissioned and the programme for the remaining 2 finally stopped.
After those arrangenments being made the greek sub fleet will be comprised of 6 or 7 214 class depended on the case of selling or not the Papanikolis.

 

[kato]

The greek shipyards which were under "german" control are now handed over to Abhu Dhabi Mar which might be a subsidiary company of the german one!

Uh, what? Abu Dhabi Mar is not a subsidiary company of TKMS. It's a sort of trusted partner, one which TKMS already sold the civilian parts of HDW to.

 

[fantasma]

Uh, what? Abu Dhabi Mar is not a subsidiary company of TKMS. It's a sort of trusted partner, one which TKMS already sold the civilian parts of HDW to.

Sorry for my misinformation. You are a 100% correct