Successful last-minute manoeuvre

Almost nine billion euros for the German Navy

In the last session before the summer break and therefore the last session before the Bundestag elections in autumn, the Bundestag Budget Committee released funds for 27 armaments projects worth almost 20 billion euros. Thanks to this parliamentary approval, the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support (BAAINBw) can now enter into contracts with industry for development, delivery and maintenance. In the maritime sector, the first contract has already been concluded for fleet service boats.

The most prominent of the approved projects is the new New Generation Weapon System (NGWS) as part of the Future Combat Air System (FCAS). The NGWS, consisting of a fighter aircraft and drones, is intended to replace the Eurofighter in the future.

In the maritime sector, eight billion euros have been approved for the procurement of sea-going units and maritime patrol aircraft. This does not lead to a significant increase in the number of flagships: Only the two U 212CD class submarines will increase the fleet's fleet, while the number of maritime patrol vessels will be reduced. Ten of the twelve approved naval armament projects serve to replace older units and make necessary adjustments to the state of the art. Taking into account the measures to maintain the capabilities of existing units, the total investment sum increases to 8.9 billion euros. Added to this is expenditure on naval missiles.

Almost half of the investments approved by the Budget Committee on 23 June will go to the navy. 6.227 billion euros will flow into naval shipbuilding, and if the Norwegian 212CD submarines are included, the figure rises to 10.637 billion.

Which maritime defence projects has the Bundestag approved?

• Two Class 212 Common Design submarines (U 212CD) from the joint programme with Norway. Norway procures four boats, Germany two.
  According to the federal budget (version from December 2020; a more recent version, which takes into account decisions made since 3 June 2021, is currently not publicly available), two billion euros have been budgeted for the two German Navy boats. Eckhardt Rehberg, budget policy spokesman for the CDU/CSU parliamentary group in the German Bundestag, stated 2.8 billion euros in a press release dated 23 June. In an answer to a question in the German Bundestag on 14 June 2021, Parliamentary State Secretary Thomas Silberhorn put the financial requirement for two boats at 1.274 billion euros. The unit costs for the boats do not include the development costs. Germany and Norway will share them in a 1:1 ratio.
  According to the information available, the financial requirements for measures accompanying the project (such as provisions, Li-ion battery, IDAS integration, management reserve) amount to 308 million euros. This results in a total requirement of 3.19 billion euros.
  According to Norwegian press reports, the Oslo procurement authority has earmarked 4.41 billion euros (45 billion Norwegian kroner) for the purchase of the four boats.
• Three Fleet service boats According to available information, the financing volume amounts to 2.028 billion euros for the replacement of the ageing Class 423 fleet service boats. The project includes a training and reference reconnaissance facility.

According to its own press release, the Bremen-based Lürssen shipyard was awarded the contract to build the three fleet service boats on 24 June. The units for open reconnaissance and intelligence gathering are expected to be available to the German Navy from 2027. Tim Wagner, Managing Director of Fr. Lürssen Werft, commented: "We will now immediately enter the design phase and start talks with potential partners from the shipyard industry and systems engineering. With a cross-shipyard cooperation, we want to combine the know-how and expertise at the shipyard sites of the Lürssen Group with the capacities of other North German shipyards in order to get the urgently needed new fleet service boats off the ground while integrating all the necessary resources."

• Two Class 707 naval fuel supplier
  Financial requirements 914 million euros (source: website of the CDU/CSU parliamentary group in the German Bundestag)

As budget policy spokesman for the CDU/CSU parliamentary group in the German Bundestag, Eckhart Rehberg, member of the Bundestag, expects the construction of the two naval fuel supply vessels at the Neptun shipyard in Rostock to begin in 2022. Completion is expected in 2025.

• Two test boats "Sea trial coast"
  Funding requirement 95 million euros (source: website of the CDU/CSU parliamentary group in the German Bundestag). The project involves the replacement procurement of a multi-purpose boat and a test boat for the Wehrtechnische Dienststelle 71, and the Budget Committee was informed on 23 June that the Fassmer shipyard in Bremen was an applicant.

• Procurement of five aircraft of the type P-8A Poseidon
  According to available information, the system price totals 1.78 billion euros (including support services). On 30 June, Defence Minister Annegret Kramp-Karrenbauer discussed the purchase with her American counterpart Lloyd Austin in Washington. According to a press release issued by the Federal Ministry of Defence, in addition to the five aircraft, the contract also includes the associated mission and communications equipment, an initial spare parts requirement and accessories, ground testing equipment and special tools, a mission support system and technical logistical support.

The P-8A Poseidon is seen as an interim solution. In the long term, together with France, the Maritime Airborne Weapons System (MAWS) will be developed. The US government approved the purchase of five of these aircraft with extensive equipment in March. At that time, the financial requirement was estimated at 1.48 billion euros (1.77 billion dollars) (source: US Defence Security Cooperation Agency DSCA).

P-8A in the design of the German Navy

• Frigate class 124: Obsolescence elimination Wide-range sensor
  Among other things, this involves the modernisation and expansion of the radar system to enable ballistic missile defence (BMD).
  In the 8th Armaments Report of the BMVg, the financial volume was estimated at 327.1 million euros, in the 9th Armaments Report at 314.8 million euros. According to the information available, the finalised contract is worth 219 million euros. In the course of the project, an additional 19 million euros will be required for other services (such as supplies, inspections including verification, target visualisation funds).
• Frigates class 123 - According to the information available, around 587 million euros (basic package/sensor package, performance-based logistics services) will have to be spent on the new command and weapon deployment system and new radar systems to ensure operational availability. This also includes shipbuilding measures.
• Minehunting boats of the MJ 332C class / Integrated Mine Countermeasure System Obsolescence elimination. Contract volume: 44.1 million euros.
• Procurement project Radar navigation system for various classes. 39.978 million must be spent on 40 on-board units, including the production of supply maturity.
• Communication system for the management of the damage defence and combat service (SAGD) on board seagoing units. Replacement procurement of trunked radio systems.
• Procurement of recertification and maintenance equipment for the sea target missile RBS 15 Mk3
• Conclusion of a contract for the manufacture and supply of missiles Naval Strike Missile Block 1A

Unusual approach

The Ministry of Defence's controversial approach in the run-up to the parliamentary debate appears to have paid off. On the home stretch of the legislative period, the Federal Ministry of Defence had submitted armaments projects for approval, some of which had not yet been funded in Section 14 (defence budget): 15 of 35 projects were presented with the note 'federal budget'. This also applied to six naval projects. The Defence Minister's last-minute manoeuvre did not have the desired effect.

Investments totalling ten billion euros for the German naval shipbuilding industry

Following the decision of the Budget Committee on 23 June, the German naval shipbuilding industry and its suppliers will be able to invest more than ten billion euros. The German maritime industry welcomes the release of the funds. In an interview with our sister magazine European security and technology Reinhard Lüken, Managing Director of the German Shipbuilding and Ocean Industries Association (VSM), said of the Bundestag's decision: "This creates planning security for the German naval shipbuilding industry for the coming years. With its shipyards and system houses as well as a large number of highly specialised and competent supplier companies, naval shipbuilding is an important strategic location factor."

Rolf Wirtz, Chief Executive Officer of Thyssenkrupp Marine Systems, commented on the approval of the funds for the German-Norwegian project: "Today, the German Bundestag has authorised the U 212CD project, enabling the contract to be signed soon. This is good news for Thyssenkrupp Marine Systems in Kiel, its employees and industrial partners. We look forward to being able to continue building the world's most modern conventional submarines in Germany to maintain this key technology and thus secure thousands of jobs for the foreseeable future."

U 212CD for the German Navy 2032 and 2034

Construction of the first submarine could begin in 2023 if the contract is signed this summer. Delivery of the first submarine for the Norwegian Navy is expected from 2029 (announcement by the Norwegian Ministry of Defence in March 2021), while delivery of the two boats for the German Navy is now scheduled for 2032 and 2034 (State Secretary Silberhorn in his answer in the German Bundestag on 14 June). In preparation for the expected order, thyssenkrupp had already initiated investments of around 250 million euros at the Kiel site in 2019 to further develop it into a centre of excellence for conventional submarine construction. The construction of a new shipbuilding hall has already begun and is at an advanced stage on the shipyard site.

The procurement projects do not include harbour support vessels and other naval operating vehicles such as diver support vessels and harbour tugs. An expression of interest procedure under the title "Cooperation company to maintain the towing, manoeuvring and bowing capability for seagoing units" was announced on 17 June 2021 with a submission deadline of 23 July 2021. The navy appears to be happy with a leasing option.

Text: Hans Uwe Mergener and Christian Kanig