Is the Philippine Navy experiencing fund shortage for it's new frigate program?

The cancellation of the option to purchase a third Hamilton-class WHEC from the US Coast Guard was announced by the Department of National Defense (DND) last week. Although this was not new since there was already an earlier announcement, the reason this time is different from the first.

Background:
Initially the DND decided to forego the purchase of another Hamilton-class vessel after it decided to instead use the ship purchase budget for capability upgrade for the 2 ships already in Philippine Navy (PN) service. These are the BRP Gregorio del Pilar (PF-15) and BRP Ramon Alcaraz (PF-16), both were stripped of their surface and air search radars, close in weapons systems, electronic surveillance measures (ESM) systems, tactical air navigation (TACAN) system, and other essential equipment before handing-over to the PN. The PN then installed new systems including additional light guns, a new commercial off-the-shelf (COTS) navigation and search radar, a new command and control suit with link with the Coast Watch System, VSAT and new satellite communications equipment and an Electronic Surveillance Measures (ESM) system. But the ships are still short on combat and surveillance capabilities, and the PN is contemplating of installing surveillance and combat systems that will increase the ship's war-fighting capabilities. But nothing much was done on this plan.

MaxDefense expected the USCGC Rush (WHEC-723) as possibly the 3rd PN WHEC.
Photo taken from USCG website.

Surprisingly the DND shifted back to the original plan of getting a 3rd Hamilton-class ship from the US, without mention of anything about the upgrade plan for the two ships already with the PN. This plan was also against earlier DND and PN statements on policy against buying "second-hand"ships, which according to them sealed the Maestrale-class frigate purchase plan's fate.

But again the new announcement to cancel the purchase of a 3rd WHEC is now directed on diverting the ship purchase budget to support the existing Php 18 billion budget for the PN's project for 2 brand new frigates.


Comparable Projects:
Previously MaxDefense brought out the issue of budgeting for the new frigates since there are doubts on what the PN can get based on comparable foreign warship project costs. For those unfamiliar with earlier MaxDefense blogs, please see these earlier posts for reference:

An In-Depth Look at the Philippine Navy Frigate Program of 2013
http://maxdefense.blogspot.com/2013/05/an-in-depth-look-at-philippine-navy.html

and

Proposed Designs Offered for the Philippine Navy Frigate Program 2013
http://maxdefense.blogspot.com/2013/05/proposed-designs-offered-for-philippine.html

Looking back on those previous assessments, it already shows that the PN budget is way lower than those of comparable regional frigate projects. MaxDefense provided some examples, but let us take another stab on the costing of the exemplified ships with the closest cost as the PN budget, as an update from last time:

Damen Schelde Shipbuilding's SIGMA-class
Based on earlier MaxDefense blogs, the Indonesian PKR Project based on Damen Schelde's SIGMA 10514 platform has the closest allocated budget as the PN at $220 million. But there are some information indicating that the Indonesian PKR SIGMA 10514 cost may only cover the hull, and the ship's mechanical and integral electronics systems plus technology transfer, and actual cost may reach closer to $280 million if including weapons and sensors. Also, the contract between Damen Schelde and Royal Moroccan Navy for 3 SIGMA ships (2 SIGMA 9813 version and 1 SIGMA 10513 version) was said to have cost $816 million as of 2008, or around $272 million per ship average although the 10513 version is expected to be more expensive than the shorter 9813 version due to the addition of an additional segment. Take note that the Indonesian PKR is slightly larger than those for Morocco.

Projected SIGMA 10514 frigate for Indonesia's PKR project.

Latest offer of Damen Schelde to Vietnam for 2 corvettes based on SIGMA 9814 was quoted by IHS Janes to probably reach $668 million, or $334 million per ship average, with one probably to be built in Vietnam and the entire contract may include technology transfer clauses.

(Note: The Damen Schelde SIGMA class is classified by a unique numbering system. The first 2 or 3 numbers signifies the length and the last 2 numbers signifying the beam, all in meters. Example: Indonesia's PKR based on 10514 means it is 105m length and 14m beam. Morocco's 10513 is 1m narrower than Indonesia's PKR.)

Hyundai Heavy Industry's Incheon-class:
Earlier information indicated that the price for the initial Incheon-class frigate for the Republic of Korea Navy (RoKN) costed $106.5 million for the hull made by Hyundai and a total cost of $232 million for the entire ship. It is still unclear if this includes Integrated Logistics Support (ILS) packages that is required by the DND/PN, and if Hyundai may opt for selected pricing premium for foreign clients like the Philippine Navy. It is expected that the amount does not include any form of technology transfer, although it is believed that the PN and DND are after this incentive.

Korea's Incheon-class frigate.

MaxDefense now expects the Philippine-offer price of the RoKN-standard Incheon-class frigate to be nearer to $250-$280 million. But the PN may always opt to remove certain items that may not be required, like RoKN-specific systems, and the land attack cruise missile Hyunmoo-3 option. The PN may also opt to replace some more-expensive systems with cheaper ones, like the installation of an OTO Melara 76mm Super Rapid gun instead of the larger and more expensive BAE 127mm Mk. 45 Mod. 4 gun.


So is there a funding shortage?
MaxDefense believes that the PN and DND may have found out that the budget they allocated for the 2 new frigates is not enough to get what they specified the ships to be capable of doing. MaxDefense sources say that the budget is already very tight as it is, and has not much allowance for the PN for additional systems that they may have overlooked. It is worth noting that the DND and PN already added Php 6 billion to the original Php 12 billion allocated for the 2 used Maestrale-class frigates without increasing the Php 75 billion allocated by the government for the Revised AFP Modernization Law for the first 5 years. 

Not only is the budget small, but it is also getting smaller everyday with the value of the Philippine Pesos falling against the US Dollar. The Php 18 billion budget for the frigate program was crafted early this year and was based on an exchange rate of $1 = Php42 ($214 million = Php 9 billion). Presently the exchange rate is around $1 = Php44.5 ($202 million = Php 9 billion), with the Peso down by more than 6% from its value a few months ago, and is still expected to fall in the next few months. It is expected that foreign shipbuilders and system providers will ask payment in US Dollars, and the PN has already lost $12 million per ship due to the declining value of the Peso.

Take note the exchange rate posted by MaxDefense on May 2, 2013 is at $1=Php41.19, while on September 6, 2013 is at $1=Php44.49, a sharp 7.5% fall of peso value already.
Photos taken from MaxDefense blog (top) and Bloomberg website (below).

Opinions and Options:
There are many ways to skin a cat, so they say. And MaxDefense sees three options for the Philippine government to solve this concern:

1. Increase budget allocation for the purchase of new frigate, to meet the budget as specified by the PN's frigate requirements.

This is actually the best solution, but the hardest to attain. The Philippine government may use Executive-sourced funding (so-called "Presidential Pork Barrel") like Fund 151 or Malampaya Special Account, which has been done before to fund AFP-related projects like the purchase of Hamilton-class cutters. There is even a growing consensus on both the government and private sector to use the Priority Development Assistance Fund (PDAF, aka "Pork Barrel") to boost modernization of the entire AFP, so if that happens this might be another source of funding.

An infographic from ABS-CBN shows what Php 10 billion from Legislative PDAF can do for the AFP (photo shows only for PN). Such amount could have given the PN enough room for improvements on the new frigate requirement.
Photo taken from ABS-CBN News website.

In some way, the cancellation of the 3rd Hamilton-class ship was another way to increase funding, this time by realignment of defense project priorities. MaxDefense does not see this as a good option, as we support the purchase of more Hamilton-class ships that are made available for the PN.


2. Avail of soft-loans offered by specific countries like South Korea to fund the ship's purchase.

There were reportedly standing offers for the Philippine government to avail soft loans, the most well-known is the offer from South Korea to avail their goods. Although a downside is the limitations to using that to buy the specific country's products, these countries have likely a strong defense industry and wide product range that the PN or the entire AFP can choose from. The only problem with this is President Aquino's previous statement from SONA 2013 of not availing loans that will become a problem of the next administration.


3. Remove or reduce expensive line items within the frigate program for separate budgeting, but building the ship to be fitted for but not with these items.

This is a common practice for military systems either to save on costs, or if a new technology still under development is expected to be placed on a certain platform. On our case it's the obviously the former. The PN may opt to build the frigate hull according to their expected capability, plus all the important items that will enable the ship to be minimally capable. Some major line items that can be separated are the surface-to-air missile systems, half of the expected anti-ship missile numbers, torpedo systems, anti-ship missile hard kill systems, and one of two possible sonar systems. 

These can already reduce the cost of the ship by around 30%-50%, and can be purchased separately should funding be available. The PN is familiar with this concept and is actually a policy for their purchase of Offshore Patrol Vessels (OPV), which has the option to be heavily armed in case of crisis or emergencies.

The Gregorio del Pilar-class frigates are actually examples of "fitted for but not with" ships. They have the capability to accept additional weapons and sensors when needed.
Photo taken from Philippine Embassy in Washington DC website.

A fourth option is possible, that is for the PN to decrease the specified requirements of the new frigate, either by decreasing its size, reducing the capability, or both, effectively making the ship more of a corvette or OPV rather than a frigate. But MaxDefense does not recommend this option at all as it does not make sense to do such option if the PN believes that they really need a frigate and not a smaller or less capable vessel.

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A clearer picture on the Strategic Sealift Vessel of the Philippine Navy

The absence of enough information regarding the Philippine Navy's Strategic Sealift Vessel (SSV) has left the public blind on what we can expect on the ship's capabilities, features and aesthetics. But the recently released Supplemental Bid Bulletin (SBB) # 4 by the Department of National Defense (DND) has brought in enough relevant information on the project, as well as some hints of future procurement plans of the Armed Forces of the Philippines (AFP), to the point that we can now somehow see a clearer picture of what the SSV really is.

The SSV is said to be smaller than the earlier MRV requirement, which was supposed to be awarded to a Korean manufacturer before based on the Makassar-class LPD.

Based on the Supplemental Bid Bulletin # 4 for the SSV project, here are the basic information of the ship's specification based on MaxDefense' interpretation (a copy of the SBB can obtained here:  http://www.dnd.gov.ph/DNDWEBPAGE_files/BAC/2013/SBB/august/SBB-AFP-PN-SSV-13-04.pdf)

Type: Landing Platform Dock (LPD)
Displacement: approximately 7,300 tons full load, subject to shipbuilder's design

Length: 120 meters minimum, subject to shipbuilder's design

Beam: 21 meters minimum, subject to shipbuilder's design

Propulsion: at least 2 Diesel engines coupled to 2 controllable pitch propellers, subject to shipbuilder's proposal

Speed: at least 13 knots cruising, at least 16 knots maximum

Range: 7,500nmi @ 13 knots

Crew: between 100 to 130 officers and men

Boats Carried: 2 Landing Craft Mechanized/Utility at floodable well decks, 2 RHIB or LCVP on Boat Davits
Passengers: at least 500 troops
Decks: Tank (? sqm minimum) and Truck Deck (800 sqm minimum)
Payload: 2,800 tons minimum

Sensors: Navigation, Surface Search Radar, Air Search Radar, EW Suite, Electro-Optical Fire Control System (all separate items to be supplied by PN), Combat Management System

Weapons: Primary: 1 x gun (possibly between 40mm to 127mm), Secondary: 2 x 30mm automated cannons port and starboard sides (EO FCS controlled), ? x machine guns (all separate items to be supplied by PN)

Aircraft Accommodation  Helideck capacity for 2 x 10-ton helicopters (based on Sikorsky Black Hawk), Enclosed Hangar for 1 x 10-ton helicopter (also based on Black Hawk)

Surprisingly, the SSV's basic requirements are similar to the dimensions of PT PAL's SSV offer. This has been posted before in earlier MaxDefense blogs about this project.

Besides the basic information of the ship, there are also more information that MaxDefense finds interesting to discuss with, and here are the following points:

1. Presence of floodable wells and helicopter deck with hangar.
These features, plus the general information of the ship's details listed above, confirms that the SSV is indeed a Landing Platform Dock (LPD), a small one though as compared to typical Western designs. Larsen and Toubro's query even included a clarification on the ship's type being labelled as an SSV when in fact the ship is an LPD. The dimensions indicate that it has similar dimensions as the Indonesian Navy's Makassar-class LPD, and surprisingly has almost the same details as the SSV offer made by PT PAL. But unlike the Makassar-class, the SSV will be smaller, lighter and may be simpler to reduce costs.

Floodable wells, like this one, are present on the SSV. An indication that it is not just an ordinary ROPAX vessel as some believe.
Photo taken from Australian Ministry of Defense website.

2. Use of Mild Steel per ASTM A131 for the hull.
A query by Stone of David highlighted this and request considering the use of a more sturdier material for the hull, although the PN insisted on mild steel. Actually mild steel can be considered an excellent ship hull material due to its high strength, sufficient ductility and low cost. It retains some strength after yielding and before failure, which is a good characteristic for ship hulls. It is also lighter, giving the ship a better power to weight ratio for efficiency, while retaining the required strength as compared to other steel hull materials.

3. Inclusion of 2 Landing Crafts Mechanized/Utility (LCM/LCU) and 2 Rigid Hull Inflatable Boats (RHIB) per ship.
The SSV program already included the provision of 2 steel-hulled LCU or LCM as well as 2 RHIBs that will be delivered together with each ship. This was unexpected although it is a welcome addition since it was assumed earlier that these boats will be bid-out separately and will require a different budget and program. Although this would also mean that the cost for these boats will be deducted from the budget allocated for the SSVs.

2 units of LCU or LCM, similar to those shown above, are included in each ship's cost and will be carried by the SSV. They must have a 25-ton load capacity and are steel-hulled.
Photo taken from US Navy website.

4. Boat davit capacity of 15 tons while RHIB at full capacity is only around 4 tons.
Several bidders like Stone of David, Larsen and Toubro, and Propmech highlighted the issue of having a boat davit with load capacity of 15 tons that will be holding the RHIB, probably because they believe this an over-design that relates to higher costs. Although the PN intends to place RHIBs on these davits, it is expected that the PN may also opt to fit the heavier LCVP in its place when necessary. Actually Stone of David's query already indicated the possibility of using the davits for LCVPs. The LCVP usually has an empty weight of around 9 to 9.5 tons and will require a higher capacity davit, on this case the PN insisted on a 15-ton capacity davit. 

MaxDefense believes that the PN would also embark LCVP on davits,like shown above mounted onboard HMS Ocean (L12), thus the requirement for 15-ton capacity.
Photo taken from thamesvessels.blogspot.com.

5. Payload capacity of deck turntables at 25 tons.
The turntable is required to be able to handle a 25-ton payload of around 7 meters long, which are probably armored vehicles from either the Philippine Marines (PMC) or Philippine Army (PA). Except for the PMC's few LVTH-6, the heaviest armored vehicles in both the PA (ACV-300) and PMC (V-300) only weigh around 14 tons. MaxDefense does not expect the incoming AAVs to use the turntables so it means that the SSV is built to accomodate larger and heavier armored vehicles should the PA or PMC acquire them in the future.

A vehicle turntable similar but not exactly the same as above, with a diameter of 7 meters and load capacity of 25 tons, will be available at the truck deck for easy maneuver of vehicles on the tight space.
Photo taken from Haynes-World blog.

6. Helicopter landing deck and hangar capacity requirement.
There is a requirement for the ship to have a helicopter landing deck for 2 helicopters, and a hangar capacity for 1 helicopter. The replies provided by the DND/PN indicated that the helicopters are 10-ton types, with a specific mention of Sikorsky's Black Hawk helicopter. Although the Philippine Air Force (PAF) currently has a single S-70A Black Hawk in its fleet (Presidential Wing asset), it is expected that the ship will accommodate navalized PN helicopters more than standard PAF ones. MaxDefense believes that the PN may have plans to purchase Black Hawks in the future as part of its Desired Force Mix multi-purpose helicopter requirement, and the PAF may also do the same.

The SSV takes the Black Hawk into consideration in its design, giving the helicopter a place in the PN's future.
Photo taken from US Navy website.

7. Replenishment as Sea (RAS) capable.
The SSV will be RAS capable, with both port and starboard sides having RAS stations for easy replenishment. The PN's Gregorio del Pilar-class frigates are capable of RAS, but this capability is currently not available with the PN, although there are some indications that the PN is trying to acquire such capability, possibly by taking replenishment from allied naval vessels in the absence of PN replenishment vessels. There is also a possibility of the PN acquiring replenishment vessels in the future, as indicated in its Desired Force Mix white paper.

A replenishment at sea (RAS) / underway replenishment (UNREP) capability is being sought for the SSV, similar to shown above.
Photo from globalsecurity.org.

8. Weapons and sensors systems costs are separate from the ship's budget.
The SSB mentioned that the weapons and sensors systems will be "owner supplied", meaning it will be provided by the PN separately. This removes the cost of these systems from the SSV's budget, and good thing considering that these systems may cost as much as the budget allocated by the DND. With these separated, shipbuilders would now have more room to provide a better offer, and is beneficial to both the bidder and the end user. 

9. Types of weapons and sensors for the ship.
Sensor types mentioned in the SSB include a surveillance radar, an air search radar, electro-optical fire control system for the secondary guns, a Combat Management System, and an Electronic Warfare (EW) suite. The presence of an option to place an air search radar feature will enable the ship to detect and track airborne threats like aircraft and cruise missiles. The PN may employ similar radar systems that they intend to install on other future PN combat vessels like the new frigate. The EW suite is an added feature that would be beneficial as it gives an added defensive feature for the ship from OPFOR attacks. As for the weapons, the SBB mentioned the presence of 2 units 30mm guns, both remotely operated with electro-optical fire control system (EO-FCS). Although not mentioned, it may be safe to assume the presence of a larger primary weapon, probably a gun system with a higher caliber the secondary guns, somewhere between 40mm to 127mm. Also like other PN vessels, it is expected to have manually-operated 12.7mm machine guns for self-defense against small boats and minor threats. No mention was made regarding missile systems or anti-missile CIWS though.

A 3D search radar, like the Thales Smart-S shown above, is not impossible to be mounted on the SSV.
Photo taken from Thales Nederland website. 

Two secondary guns, similar to the Mk.38 Mod.2 shown above but with a 30mm gun, is eyed for each SSV. These would be remotely controlled, and linked to an electro-optical fire control system.
Photo taken from Wikimedia.

10. The SSV are configured as possible flagships.
The SBB confirms the earlier press releases that the SSV will also serve as flagships and mobile government centers aside from being amphibious transport vessels. The supplemental bulletin acknowledge the presence of a Presidential Room as well as a War Room, which are instrumental for government functions including the presence of the President of the Philippines in cases of emergencies and needs that require him and other key government officials to be on the ship.

Besides the above-mentioned details, some other information on the ship includes:
- the ships are designed to accommodate future AAVs (probably based on the AAV-7A1)
- availability of water desalination system capable of producing 25,000 liters per day;
- provision for bow thrusters, possibly for installation in the future;
- LCU / LCM will be steel-hulled, empty weight of 70 tons, load capacity of 18 tons or 80 troops, armed with 2 x 50 caliber machine guns;
- SSV delivery will be on Manila's South Harbor Pier 13


The scheduled submission and opening of bids is on August 29, 2013, although there is still a possibility of moving it to a latter date similar to what happened to other DND projects. Until then, let us see who among the potential bidders could step forward and offer their services to the DND.




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Updates:

August 29, 2013:
Of the 9 potential contenders for the SSV project, only 2 submitted their bids: PT PAL Indonesia (builder of Banjarsamin-class) and Daewoo-Daesun of South Korea (builder of Makassar-class). But after further examination, the DND only qualified the bid of PT PAL, while Daewoo-Daesun was disqualified. It is still a hanging project as PT PAL needs to pass the post bid qualifications, which may start soon.

More of the news here and here.

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February 3, 2014:
The Philippine Navy has already provided the Notice of Award (NOA) for the SSV project to Indonesia's PT PAL after passing the post-bid qualifications and inspections. PT PAL itself confirmed receiving the NOA late last month, and is expecting the signing of contract to follow soon following these developments.

More here.

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The 4 Potential Bidders for the 3rd Bid to Supply 21 UH-1 Helicopters to the PAF

There are now 4 potential bidders that may take part in the 3rd re-bidding to supply the Philippine Air Force (PAF) with 21 used UH-1 Huey combat utility helicopters. These are the companies that bought the bid documents and are expected to submit a bid on August 30, 2013. Originally it was reported that 14 companies were interested in the project, but it is surprising that less than half made real intentions to join.

The PAF still sees the importance of having more UH-1H Hueys in its inventory, and it is expected that this type will be in service with the PAF for at least 10 more years from now.

MaxDefense made a brief summary as a preview of what these companies can do (click on the company names to access their official websites for further information):

1. RADOM Aviation Systems Ltd. (Israel);
2. Singapore Technologies (ST) Aerospace Ltd. (Singapore);
3. Stone of David Tactical Equipment (Philippines);
4. Vector Aerospace (Canada)

Here is a short summary of the said companies, below are MaxDefense' initial information about them:

Radom Aviation Systems Ltd. is an Israeli company, and according to their official website, the company "specializes in upgrade and modernization of military and civil helicopters and aircraft". It has been operating for more than 25 years, and is also said to be capable of supplying platforms that include the UH-1 series. It is worth noting that Radom submitted a bid for the 1st and 2nd earlier attempts for this project, although their 1st bid failed for not satisfying the requirements and lost on the 2nd bid to a US-based company. 

Israel-based Radom Aviation Systems Ltd. specializes in helicopter refurbishing and maintenance, including the UH-1 series.
Photo taken from Radom Aviation website.

ST Aerospace Ltd. is a subsidiary of Singapore Technologies (ST) Engineering. It is said to be one of the world's largest 3rd party aircraft maintenance, repair and overhaul (MRO) provider, and has previous experience in supplying refurbished UH-1H Hueys to the Philippine Air Force in the last decade. It also bought bid documents in previous bid attempts but did not submit a bid for unknown reasons. In their previous supply contract, ST Aerospace used US-sourced UH-1H and refurbished them before delivery to the PAF, so it may do the same this time should it win the bid. ST Engineering was also identified before as interested in supplying the Philippine Navy with 2 new frigates.

Singapore-based ST Aerospace is one of the world's largest MRO service provider, and has experience in supplying refurbished UH-1 helicopters for the PAF.
Photo taken from ST Aerospace website.

Stone of David Tactical Equipment is a Filipino company that specializes in small arms and personal protection gear, but is said to have contacts with foreign defense manufacturers through its mother company, Joavi Philippines Corp., including Israel Shipyards, IMI and others. It has also bought bid documents in the previous bid attempts but did not submit a bid also for unknown reasons. This company has been actively joining bidding programs of the Philippine military for some time now, recently also purchasing the bid documents to supply 2 amphibious transport vessels for the Philippine Navy.

Philippine-based Stone of David Tactical Equipment, has partners in the Israeli defense industries through its mother company, Joavi Philippines Corp.
Photo taken from Joavi Philippines website.

Vector Aerospace is a Canadian company that operates in several countries, and is said to be another leading MRO provider. They claim to have more than 2 decades of support experience for various Bell helicopter models including the UH-1 series. They also offer customizable upgrades program for the UH-1, which is useful considering that the requirement is to include supplying upgraded UH-1 helicopters besides the standard model. It is possible that Radom will use US-sourced UH-1H aircraft should they be chosen by the DND.

Canada-based Vector Aerospace also specializes in refurbishing and upgrade of Bell helicopters including the UH-1 series.
Photo taken from Vector Aerospace' website.

Similar to previous bid attempts, MaxDefense believes that not all 4 prospective bidders may submit a bid, so we expect less than 4 bid submissions by August 30, 2013 deadline. MaxDefense will be closely monitoring any updates regarding the bidding of this project, as this project has already been delayed after several promises by the DND to have the helicopters usable by the last mid-term elections. 

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UPDATES:

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September 9, 2013: 

There were actually 4 more bidders for the Supply of UH-1 project: the 4 others beside those indicated in MaxDefense blog are:

5. Rice Aviation Services (USA) / Eagle Copter Ltd. (Canada) joint venture;

6. Serpenair Group Inc. (Philippines) / Bell Helicopters (USA);

7. Overseas Aircraft Support Inc. (USA);

8. Aerospace Engineering Group (USA)

Bid submission and opening date and only 1 bidder, a joint venture of US-based Rice Aviation Services, Inc. and Canada-based Eagle Copter Ltd. submitted a bid. This lone bid was found ineligible after failure to comply on documentation requirements. The DND then announced that they would enter into negotiated bidding with the interested parties.

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January 3, 2014:
As posted on MaxDefense @ Facebook page, a notice of award was given to the joint venture of US-based Rice Aircraft Services and Canada-based Eagle Copter. A contract will follow soon. They are required to deliver the 1st batch of helicopters within 6 months or by around June 2014. Rice Aircraft Services-Eagle Copter JV got the contract through a negotiated bid after the bidding for this project failed 3 times in the past. More from the news HERE.

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July 4, 2014:
The PAF received its first 4 UH-1 helicopters before the end of June 2014, and was able to present the aircraft during the 67th anniversary celebrations of the PAF. According to DND, 3 more aircraft are expected to arrive this July 2014, and that all 21 units will be delivered before the end of the year. 

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PN's Strategic Sealift Vessel and its relation to the sinking of MV St. Thomas Aquinas

The recent accident involving the passenger ferry MV St. Thomas Aquainas and the cargo ship Sulpicio Express Siete off Cebu City is a very unfortunate event, with still hundreds reported missing besides the dozens of confirmed deaths. According to news reports, the 2 ships collided just near the Cebu port, with the cargo ship's bow hitting the passenger ship on its side, sinking the ferry in just less than 30 minutes (some latest reports put the time as early as 10 minutes) More details about the accident could be found in local and foreign news, and won't be elaborated much in this blog.

The ill-fated passenger ferry MV St. Thomas Aquinas. The ship is probably even larger than the PN's specified Strategic Sealift Vessel (SSV).
Photo taken from Shipspotting.com c/o Bermejo Imaging.

The cargo ship Sulpicio Express Siete, with its bow damaged.
Photo taken from Reuters.

So what is the relation between the MV St. Thomas Aquinas ferry tragedy with defense issues that are usually highlighted in MaxDefense blogs?

The Philippine Navy's current transport ship project, the Strategic Sealift Vessel (SSV), as well as the currently on-hold Multi-role Vessel (MRV) project, as well as the passenger ferry MV St. Thomas Aquinas are all designed and built/to be built using commercial shipbuilding standards.

The damaged bow of the cargo ship Sulpicio Express Siete.
Photo taken from Associated Press.

The SSV will probably be built according to commercial standards due to the need to drive down costs and fit the allocated budget. The current SSV project budget is Php 2 billion per ship, and will probably cost even less depending on the winning bidder. As compared to similar-sized LPDs, which cost thrice or more to build such using naval shipbuilding standards, which are constructed to ensure high survivability in combat and ability for the ship's structure to survive impacts and attacks. It is worth mentioning that the original SSV project actually involves the purchase of a used Japanese Ro-Ro ferry very similar to the ill-fated MV St. Thomas Aquinas (as discussed here).

The initial Strategic Sealift Vessel project was actually based on a Japanese passenger Ro-Ro ferry very similar to the ill-fated MV St. Thomas Aquinas.
Photo taken from MarineTraffic.com.

As an example: the Indonesian Navy's Makassar-class LPD and Royal New Zealand Navy's HMNZS Canterbury (L421) are all based from commercial car ferry designs, and it is highly probably that the SSV will also be based on such platform. Daewoo International / Dae Sun Shipbuilding of South Korea and PT PAL of Indonesia, both builders of the Makassar-class LPD, are both vying to win the contract for the PN's SSV project (and probably the MRV project should it proceed in the future) using a derivative of the Makassar-class LPD. 

PT PAL's SSV proposal for the Philippine Navy is actually a derivative of the car ferry-based Makassar-class LPD.

As a military transport, the SSV is projected  to be used to transport the Philippine Marine Corps' expeditionary forces in combat conditions, and is expected to be targeted by opposing forces. It is expected that the ship would have a far greater threat parameters than a standard merchant vessel. But the SSV, like any normal sea vessel, must also survive accident impacts unlike what happened to MV St. Thomas Aquinas, which just plunged to the bottom of the Cebu Strait immediately after impact. It must be capable of surviving even after serious flooding of several compartments, enough for it to still move away from danger and keep its passengers and crew safe. 

Indonesian Marinir (Marines) troops and tanks for transport using the TNI-AL's Makassar-class LPD. The Philippine Marine Corps will use the SSV in the same manner, including in combat conditions when necessary.

The Philippine Navy's SSV project planners must give importance to the survivability aspects of the SSV regardless of cost implications. Sinking in just 10 to 30 minutes after impact could mean that the ship design may not have incorporated the provision of multiple compartment design to effectively control flooding, plus possibly the lack of or inefficiency of crew to control flooding on the hull. The PN must be aware of what happened to the MV St. Thomas Aquinas and ensure that faults on the ship will be remedied and addressed the SSV design or any future naval ships in its fleet.

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9 Potential Bidders for the Philippine Navy Strategic Sealift Vessel (SSV) Program

For the upcoming bidding to supply 2 brand-new Strategic Sealift Vessel (SSV) for the Philippine Navy (PN) worth Php 2 billion each, there were 9 potential bidders, these are entities that bought the bid documents from the Department of National Defense (DND). The following are the said companies/entities that might submit bids on August 29, 2013 (click on the company name to view their official webpages):

1.  ASTARTEZ Defense and Rescue Solutions (Philippines) - Coastal Industries Pte Ltd (Singapore/Vietnam) Joint Venture;
2. Daewoo International Corp. / Dae Sun Shipbuilding & Engineering Co. Ltd. (South Korea);
3. Keppel Philippines Marine, Inc. (Singapore/Philippines);
4. Larsen and Toubro Ltd. / L&T Shipbuilding (India);
5. PROPMECH Corp. (Philippines)
6. PT Citra Shipyard (Indonesia)
7. PT PAL (Indonesia)
8. Stone of David (Philippines);
9. STX Offshore & Shipbuilding Co. Ltd. (South Korea)

Let us get to know these companies, below are MaxDefense' initial information about them:

ASTARTEZ Defense and Rescue Solutions is a company based in Paranaque City, which specializes in supplying small arms, tactical and rescue gear and personal combat equipment, and has no experience in shipbuilding or marine products. The company has identified its marine component joint venture as Coastal Industries Pte. Ltd., said to be a Singaporean-Vietnamese company. MaxDefense tried to find anything about this foreign company but have failed miserably. MaxDefense will try to find out more about Coastal Industries Pte. Ltd.


Daewoo International Corp. and Dae Sun Shipbuilding & Engineering Co. Ltd. are large South Korean companies, and prides itself of being the designer and builder of the Makassar-class Landing Platform Dock (LPD) for the Indonesian Navy (TNI-AL), and is currently involved in supplying the Peruvian Navy with a similar ship under is "Buque Multiproposito" project. It was known before that they offered the Philippine Navy with a Makassar-class derived design for the PN's Multirole Vessel (MRV) project before, and is believed to be offering a smaller derivative for the SSV project. Due to their previous cooperations with Hanjin, it may be possible for Daewoo / Dae Sun to tap Hanjin's Subic Shipyard for local production as it would be more palatable to DND officials due to its ability to convert the project as a local investment. 

Daewoo / Dae Sun have previously offered the Makassar-class LPD for the PN's MRV project, before it was put on hold in favor of the smaller SSV. They may offer a derivative of the Makassar-class for the SSV.
Photo taken from Timawa.net forums c/o Adroth.

Keppel Philippines Marine Inc. is the local subsidiary of Singapore conglomerate Keppel Corporation. It has shipyards in Batangas and in Subic, and has been involved in several projects of the Philippine Navy in the past, including the refitting and refurbishment of the PN's 2 Gregorio del Pilar-class frigates before their commissioning. Due to some tie-ups with Singapore's ST Engineering Ltd., there is a possibility that Keppel Philippines will be using ST Engineering's designs including the Endurance 120 series which was reported previously in MaxDefense to have been offered separately by ST Engineering. Having a local shipyard that can do the work is also an added advantage for KPMI.

Keppel Philippines may probably cooperate with ST Engineering to use the Endurance 120 series design for the SSV.
Photo taken from ST Engineering website.

Larsen & Toubro Ltd. is one of India's largest conglomerates, and its subsidiary L&T Shipbuilding has been actively involved in India's naval shipbuilding industry. It's latest involvement is in the construction of India's first indigenous nuclear-powered submarine, the INS Arihant, which it was the prime integrator. It also prides of having the largest naval shipyard in India. Their representatives were spotted in Cavite Naval Base early this year and are speculated to be involved in other projects of the Philippine Navy. 

L&T Shipbuilding is recently involved in the construction of India's first indigenous nuclear powered submarine, the INS Arihant. But no indication that they were able to build an SSV or similar platform before.

The Philippines' PROPMECH Corporation is one of the active marine suppliers of the Philippine Navy in recent years, being involved in upgrading several of the PN's patrol boats, and have been successful in delivering the 1st (supply) and 2nd batches (supply and build) of Multipurpose Attack Craft (MPAC) and the largest locally made PN ship, the BRP Tagbanua (AT-296). In building AT-296, PROPMECH got the services of Philippine Iron Construction and Marine Works, so it is expected that they will carry out the same arrangement. 

PROPMECH has previously delivered the PN"s newest LCU the BRP Tagbanua (AT-296).

PT Citra Shipyard is an Indonesian company, with their shipyard just opposite Singapore in Batam Island. MaxDefense doesn't have much on the shipbuilding experience of this company, but their website indicate that they have built numerous commercial barges. MaxDefense will try to find out more about this company, stay tuned on this blog's commentary section.

PT Citra's website indicate that they are specialized in building commercial barges, like this one.
Photo taken from PT Citra's website.

PT PAL is Indonesia's largest naval shipbuilder, and has extensive experience in building amphibious transport vessels for the Indonesian Navy. They are the recipient of the technology transfer deal from South Korea's Dae Sun Shipbuilding to locally build some of Indonesian Navy's Makassar-class Landing Platform Docks (LPD). PT PAL has already offered the PN their own LPD design derived from the Makassar-class, and has also previously offered their proposal for the SSV. So far they are the only entity that we have some familiarity on their SSV proposal.

PT PAL previously offered the DND and PN it's SSV proposal. MaxDefense believes that the PN based the specifications for its SSV on PT PAL's offer.

Stone of David, if MaxDefense is not mistaken, is actually a tactical equipment supplier, and is an active bidder for individual weapons & personal protection systems (please correct us if we are wrong on this). Due to its inexperience in shipbuilding and marine industry, it may be possible that they will have either a joint venture or sub-contractor to do the ships on their behalf. So far MaxDefense is unaware of who their appointed shipbuilder will be so we cannot assess what it can do.

Is MaxDefense correct? We believe the Stone of David company that is interested in the SSV project is the same Stone of David that supplies handguns and personal protection gear.
Photo taken from Stone of David's FB page.

South Korea's STX Offshore & Shipbuilding is the world's 4th largest shipbuilding company, and has extensive experience in building large commercial vessels (supertankers, etc) and they also have designs that will suit naval requirements. STX through its European subsidiaries, has been involved in building the French Navy's Mistral-class amphibious assault ships. No doubt that they can carry out the PN's SSV project. Like Dae Sun and Daewoo, it might be possible for STX to have shipbuilding agreements with Hanjin Subic Shipyard to build the ships in the Philippines if necessary to make their offer more acceptable.

As the world's 4th largest shipbuilder, STX Offshore & Marine, through its European subsidiaries, was also greatly involved in the construction of France' Mistral-class amphibious assault ships.

Surprisingly, there were a number of expected bidders that did not bought the bid documents. These are Spain's Navantia which previously offered the Athlas 8000 to the PN for its MRV project. Another is Australia's Austal, which has a shipyard in Cebu that can be used as an offset for the project. European companies are also absent, which may have found the budget for the SSV as unattractive for profit. American shipbuilders are also absent, like the Singaporean-owned VT Halter Marine which built the PN's Bacolod City-class LSVs.

Navantia did not purchased the bid documents, but they still have time to do so. They have been offering the Athlas 8000 to the PN for some time now.
Photo taken from Navantia's website.

 As the submission of bids is still scheduled on August 29, 2013, there is possibility that other entities may be interested in procuring the bid documents and submitting a bid besides the 9 that bought earlier. MaxDefense will be closely monitoring any updates regarding the bidding of this project, as this is a major procurement item that would increase the capability of the PN.

Of the 9 prospective bidders, MaxDefense believes that there will be several entities that would not submit the bid, so we expect less than 9 bid submissions on the deadline. The schedule of the SSV project has already been delayed by 1 1/2 months so it is hoped that this won't be a failed bid.

For reference about the PN's SSV program, you may refer to MaxDefense' previous blog here: 
Developments on Strategic Sealift Vessel Purchase for the Philippine Navy - Invitation to Bid Released. (http://maxdefense.blogspot.sg/2013/06/developments-on-strategic-sealift.html)



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Updates:

August 29, 2013:
Of the 9 potential contenders for the SSV project, only 2 submitted their bids: PT PAL Indonesia (builder of Banjarsamin-class) and Daewoo-Daesun of South Korea (builder of Makassar-class). But after further examination, the DND only qualified the bid of PT PAL, while Daewoo-Daesun was disqualified. It is still a hanging project as PT PAL needs to pass the post bid qualifications, which may start soon.

More of the news here and here.

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