The Philippine Navy, through its Flag Officer in Command (FOIC) Vice Adm. Giovanni Bacordo, announced on 15 May 2020 that the first of the Jose Rizal-class frigates built by Hyundai Heavy Industries (HHI) will be leaving the shipyard in Ulsan, South Korea on 18 May 2020, and arriving in Subic Bay in the Philippines by 23 May 2020.
The announcement mentioned that frigate, the future BRP Jose Rizal (FF-150). would sail with 60 Philippine Navy crewmen, and 40 Korean personnel, and the ship would undergo Technical and Acceptance Inspections once it arrives in Subic Bay.
While this appears to be good news for the Philippine Navy as the arrival marks a new milestone to their history as it becomes closer to becoming a modern navy, there are still several issues that are needing for clarity.
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| The first ship of the Jose Rizal-class, the future BRP Jose Rizal (FF-150). Photo taken from and credited to Hyundai Heavy Industries. |
Quick Background:
MaxDefense previously posted in our blogs and Facebook page that Hyundai Heavy Industries appears to have not fully met the project requirements of the Frigate Acquisition Project, which eventually became the Jose Rizal-class frigates.
While there were some minor issues that we believe can be settled later on, one major issue that hounds the project is the requirement for compatibility of the Combat Management System (CMS) with the US-NATO Tactical Data Link 16 (Link 16).
This requirement was among those agreed upon and included in the project's Contract between the Department of National Defense (DND) and Hyundai Heavy Industries that was signed on 24 October 2016 bt Defense Sec. Delfin Lorenzana, and HHI Executive Vice President Kisun Chung
HHI and its subcontractor Hanwha Systems previously confirmed in Senate hearings conducted in 2017 that the Hanwha Systems Naval Shield Integrated Combat Management System, which is the CMS installed on the new frigates, are not yet compatible to Link 16 as of then, although they are expecting it would be certified as compatible with Link 16 by 2019.
By 2019, Hanwha Systems was not able to get the Naval Shield ICMS to be compatible with Link 16 due to reasons beyond its control. MaxDefense reiterated that the risk from 2016 was not mitigated, and has now become an actual problem. HHI and Hanwha Systems promised that the ship would be delivered with Link 16 compatibility in 2020.
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| The future BRP Jose Rizal (FF-150) during its launching in 2019 at HHI's naval shipyard in Ulsan, South Korea. Photo from Inquirer.net. |
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| Hanwha presented their Naval Shield ICMS to Philippine media during the launch of BRP Jose Rizal in 2019. Photo from Inquirer.net. |
MaxDefense received information from officials familiar with the Link 16 issues that a simulation test using the Ultra Electronics ADSI, as what Hanwha Systems did, may not be sufficient reason enough for the US JITC and Link 16 office to provide certification.
If the US Link 16 Office and JITC doesn't provide any certification, the Philippine Navy risks accepting the ship that in the end, the US will not accept for installation of the Tactical Data Link 16.
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| The two ships of the Jose Rizal-class docked in HHI's yard in Ulsan, South Korea. Photo exclusively shared to MaxDefense Philippines. |
Accepting the Frigate or Not:
It remains to be seen now if the Philippine Navy's Technical Inspection and Acceptance Committee (TIAC) will accept the ship or not.
Of course it would be good news for everyone, including MaxDefense, if HHI and Hanwha Systems could REALLY provide the certification from US certifying agencies like JITC, because this means that finally, we can say that the ship is fully compliant to the requirements.
MaxDefense would even be happy for the Philippine Navy to continue with its planned Corvette Acquisition Project with HHI and Hanwha if they can prove that the Naval Shield ICMS is TDL16 compatible.
But as our last check just a few days ago, there is still no sign that a US certification was obtained by HHI and Hanwha Systems to support their claim that the Naval Shield ICMS is TDL16 compatible.
But MaxDefense believes that, despite the issues surrounding the frigates and its Combat Management System, the Philippine Navy will accept the ships.
Why the PN Would Accept the Ships, TDL16 Compatible or Not:
MaxDefense believes that despite the warnings made since 2016, and despite the Philippine Navy knowing the issues very well, the Philippine Navy would still accept the frigates, with or without the Link 16 compatibility with the Naval Shield ICMS.
There are several reasons that we believe are in the heads of the Philippine Navy's leadership, which we believe include the following:
1. RIMPAC 2020:
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| RIMPAC 2020 is happening in August 2020, and the Philippine Navy is said to be joining once again with the FF-150. Photo of RIMPAC 2020 logo from RIMPAC's official FB page. |
One of our community members commented in our last Facebook post that the ship's "going to a party, but isn't well dressed enough". While MaxDefense believes that being "well dressed" is needed, the ship is indeed going to a party.
MaxDefense has received confirmation that the Philippine Navy is joining the Rim of the Pacific Exercises 2020, which is scheduled in August 2020 in Hawaii, USA. And guess which ship is the Philippine Navy sending?
Yes, its no other than the future BRP Jose Rizal (FF-150), which is expected to be commissioned with the Philippine Navy by then. MaxDefense is expected that a shipboard helicopter will accompany the frigate, but it still remains to be seen if the PN will send the new AgustaWestland AW159 Mk220 Wildcat, or the older and less capable AgustaWestland AW109E Power naval helicopter.
The exercises is expected to only have the At Sea Phase due to the COVID-19 pandemic still expected to be ongoing. So the PN is only sending a combat ship, unlike in 2018 when it sent a Marine Battalion Landing Team and a Landing Platform Dock.
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| RIMPAC 2020 is happpening. Photo from US Navy. |
2. Pressure from Greased Public Officials:
It would be remembered that as early as April 2020, MaxDefense already received word that Hyundai Heavy Industries is already pushing for the delivery of the frigate, and has already sent their people to meet "people with influence" within the Philippine government.
Despite the issues on the frigate being very obvious, the deal still pushed through according to HHI's wishes despite not legally questionable. This means that there are questionable activities happening in the backstage of the show.
If the frigate's acceptance is delayed, it means more expenses for HHI since the Philippine government cannot release the milestone payments for the ship's delivery. Based on the project's payment terms and delivery schedule included in the contract, HHI will be paid 10% of the contract price and reach a total of 80% of the contract price by the time the 1st frigate is accepted and delivered to the Philippine Navy.
It would be favorable for HHI to spend a little more just to get this project moving forward. And that "little more" may include "grease" for our officials.
3. Philippine Navy's Desperation for Additional Hulls:
Just a few weeks ago, the Philippine Navy just had one of its major surface combat asset, the Del Pilar-class frigate BRP Ramon Alcaraz (PS-16) in a minor accident off the coast of India. While the damage appears to be minimal, MaxDefense received information from Navy sources that it might taken several months for a complete repair to be made, that is even with assistance from the US Navy's Naval Sea Systems Command.
If true, this means the BRP Ramon Alcaraz may not be available for service for almost the entire remaining months of 2020.
This is not a good timing for the Philippine Navy, since it is in the process of retiring three (3) more World War 2-era warships within 2020, while its sistership BRP Gregorio del Pilar (PS-15) is still under repair and is not expected to return to service until mid to late 2021 as it will proceed with upgrade works in late 2020 or early 2021 even after repairs on the ship are done.
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| The BRP Gregorio del Pilar (PS-15) has not yet recovered from the damages it took in 2018. It is expected that repairs would be completed by 2020, although the ship is lined for upgrade works in early 2021. Photo from Inquirer.net. |
This means that only the Del Pilar-class frigate BRP Andres Bonifacio (PS-17) and the Pohang-class corvette BRP Conrado Yap (PS-39) remain as the only available major surface combatants of the Philippine Navy as of this writing. The addition of the future BRP Jose Rizal (FF-150) would boost the Philippine Navy's hull availability
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| The PN only has the Pohang-class corvette BRP Conrado Yap (PS-39) and the Del Pilar-class frigate BRP Andres Bonifacio (PS-17) as its main surface combatants at the moment. Photo from PN. |
4. Obtaining Assistance from South Korean Government:
The acceptance of the future BRP Jose Rizal may also be tied to other projects that the Philippine Navy is trying to close with the South Korean government.
One is obtaining soft loans to support the Corvette Acquisition Project which the DND and PN are pushing to be awarded to a Korean shipbuilder (most likely HHI).
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| The Philippine Navy plans to acquire 2 new corvettes, which is said to be based on an improved version of the Jose Rizal-class frigates, and would be built again by HHI. Photo shared exclusively to MaxDefense. |
The other is obtaining excess defense articles from the South Korean Ministry of Defense, which may include a second or even a third decommissioned Pohang-class corvette formerly used by the Republic of Korea Navy.
Allowing the frigate to be accepted without too much question will give the DND and PN more bargaining power with the South Korean government for both proposed projects.
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| The Philippine Navy is after the acquisition of additional decommissioned Pohang-class corvettes from the South Korean government. |
5. Liquidated Damages:
If the frigates remain undelivered, HHI is expected to get penalized and could be paying for Liquidated Damages (LD) as stipulated in the contract annexes. It would be remembered that HHI promised to deliver the ship in April 2020, although the COVID-19 pandemic may be a valid reason for the delays. But further delays may not be acceptable enough to be considered as an aftereffect of COVID-19 issues.
HHI will try its best to push the DND and PN to accept the ships, so that HHI won't be paying for the LD and lose more money in the process.
For those who are not familiar with commercial contracts, paying Liquidated Damages is a damning thing for a company to do because it is considered a loss for any company to do so.
6. Protecting HHI and the South Korean Defense Industry's Image and Credibility:
For HHI to unable to deliver the frigates on time or for the wrong reasons would hit the company's credibility and image globally. The Philippine Navy's frigate is not a complicated project compared to many of its previous accomplishments, and HHI is expected to complete the deal with ease.
Not only HHI's credibility will be affected, but also by Hanwha Systems and the entire South Korean defense industry too, which is aiming to be one of the largest in the world in terms of export sales.
It is expected that the South Korean government, and by extension HHI and Hanwha Systems, would do everything to keep their save the reputation of their defense industry, considering Koreans are known to be very sensitive in issues that will damage their credibility, image, reputation, and pride in the global market scene.
More Issues than the Link 16 Compatibility?
Prior to finishing this blog entry, MaxDefense received more information from Philippine Navy sources that the Link 16 compatibility issue with the Combat Management System appears to be just a minor issue now. Not much was provided to us, but it only means that there are other pressing issues on the project. But we'll probably leave that for now as we would need more time to gather more information.
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| An infographic of the subsystems of the Jose Rizal-class frigate. So what else could be experiencing problems here aside from the CMS? Photo from Inquirer.net. |
MaxDefense and its entire defense community hopes that the Philippine Navy, especially its leadership and the Technical Inspection and Acceptance Committee (TIAC) and Project Management Team (PMT) would do its job well for the sake of the Philippine Navy's and the Philippines' interests.
Project Summary:
Frigate Acquisition Project Lot 1 - Frigate Platform with Launchers
* End User: Philippine Navy (Offshore Combat Force)
* Quantity: 2 units
* Modernization Phase: Horizon 1 phase Priority Projects of RAFPMP
* Project ABC: Php16,000,000,000.00
* Acquisition Mode: 2-Stage Public Bidding
* Source of Funding: TBA
* SARO Release: TBA
* Winning Proponent: Hyundai Heavy Industries (HHI) of South Korea
* Product for Delivery: HDF-2600 frigate (Jose Rizal-class)
* Contract Price: Php15,744,571,584.00
* Residual Amount: Php255,428,416.00
* Expected Delivery: PN expects first ship by May 2020, second by September/October 2020.
* First post by MaxDefense: 02 May 2013
* Searching Hashtag: #PNFrigateAcquisition #PNFAP
* Status: First ship, future BRP Jose Rizal (FF-150) scheduled for delivery and arriving in the Philippines by 23 May 2020. Second ship, future BRP Antonio Luna (FF-151) undergoing dockside completion works, in preparation for sea trials.
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First edit and release: 17 May 2020
Copyright MaxDefense Philippines
so they want to send another ship to RIMPAC 2020 even though we lack ships to patrol our coastlines?
ReplyDeleteThis is my opinion up to this time only unless there's progres happened in the future on this preoject.
ReplyDeleteFirst it is shame to name this ship as BRP Rizal when its history is plagued from the start in corruption.
To the Philippine navy you have proven yourself the worst of all the brances of the AFP to date. So shameful that you will take the money on the things that could save the lives of people who will be operating this. May the blood be on your hands and the grief of their families may mark and haunt your disgraced name forever. COURAGE,INTEGRITY,LOYALTY servant of the Filipino people indeed. Not only YOU were the laughing stock. But you gave the country an image that it can be easily to manipulate.
Second to korean especially to HHI. All those insults that Philippines is a land of corrupt, well now look at youself all those bravado and honor but your no different from us. Hope the world know how your dirty work and how you deliberately undermine the transactions for your corrupt ways. First selling us defective surion helicopter, selling us AAV that takes forver to deliver and you have the gull to sell us more of your products? May your reputation be tarnished and HHI go to the place you deserve. A bunkcrupt company. NO MORE KIMCHI. Mubuhay ang lahing Pilipino.
HHI and the PN are complicit in this corruption. First of all, HHI pressed the PN to use their CMS despite the fact that the PN insisted on using Thales. Now, the US Link 16 office refuses to certify because they are corrupt as well and are connected to the European defense industry. Now, the PN who doesn’t want to miss the RIMPAC party (like a bunch of teenage girls) will do anything to accept the new ship. The brass should all be fired.
ReplyDeleteThe truth is, the product delivered to the PN is unacceptable and they should sue the HHI for a breach of contract. To think that there will only be few frigates and corvettes the PN will have in a given battle, those important systems become very important. This is the time Duterte has to intervene and not accept these two warships.
The Philippine government should just tear off this Korean CMS from the Rizal class and install the Thales. The Korean CMS is apparently un-certifiable for Link 16.
ReplyDeleteCapital projects approved are supposed to have 10% contingency and would have covered the cost for the Thales system HHI was asking for. No one should approve projects without that contingency 10% cost factor added. There are always issues in the construction phase that needs additional expenditure. This would be a good example why the extra 10% could have nip the issue in the bud.
The truth is both sides are to blame. The PN should have had the Thales system specified in the bids and, they didn’t. On the other hand, HHI promised that Link 16 will be installed and they failed to deliver. This part is breach of contract and should not be accepted by the customer PN. Accepting this ship for use is not tantamount to accepting this ship as a finished product. The urgency for need of patrolling only pressures the PN to accept the ship while incomplete.
A 50/50 agreement should at least be reached where both HHI and the PN pays haft each for a replacement Thales system completely installed. I would not pin my hopes that HHI will agree to such arrangement but, HHI (and the Korean government who should be involved in the issue) should realize, future projects from the AFP could be at stake. In the long run if even a 25/75 cannot be arrange and the PN will have to eat all the costs. My advice is, for it because Link 16 is too important to not have. A Link 16 platforms’ interface can win or lose battles specially for forces of lower numbers. If this be the case, the PN should consider all other projects directed to other companies from other countries.
The PN should send the DND a “Request for Additional Capital” based merely on the fact that a 10% contingency was not added to the total cost of the project. This is the justification for in truth, no project is ultimately a perfect project. There are things that are overlooked in bids detail, drawing errors or lack of drawing details, specification errors, unforeseen delay that may cost the customer if proven to be customer related.
The Philippine government should just tear off this Korean CMS from the Rizal class and install the Thales. The Korean CMS is apparently un-certifiable for Link 16.
ReplyDeleteCapital projects approved are supposed to have 10% contingency and would have covered the cost for the Thales system HHI was asking for. No one should approve projects without that contingency 10% cost factor added. There are always issues in the construction phase that needs additional expenditure. This would be a good example why the extra 10% could have nip the issue in the bud.
The truth is both sides are to blame. The PN should have had the Thales system specified in the bids and, they didn’t. On the other hand, HHI promised that Link 16 will be installed and they failed to deliver. This part is breach of contract and should not be accepted by the customer PN. Accepting this ship for use is not tantamount to accepting this ship as a finished product. The urgency for need of patrolling only pressures the PN to accept the ship while incomplete.
A 50/50 agreement should at least be reached where both HHI and the PN pays haft each for a replacement Thales system completely installed. I would not pin my hopes that HHI will agree to such arrangement but, HHI (and the Korean government who should be involved in the issue) should realize, future projects from the AFP could be at stake. In the long run if even a 25/75 cannot be arrange and the PN will have to eat all the costs. My advice is, for it because Link 16 is too important to not have. A Link 16 platforms’ interface can win or lose battles specially for forces of lower numbers. If this be the case, the PN should consider all other projects directed to other companies from other countries.
The PN should send the DND a “Request for Additional Capital” based merely on the fact that a 10% contingency was not added to the total cost of the project. This is the justification for in truth, no project is ultimately a perfect project. There are things that are overlooked in bids detail, drawing errors or lack of drawing details, specification errors, unforeseen delay that may cost the customer if proven to be customer related.