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Review of the market of non-nuclear submarines

Presently, the fleets of 44 countries exploit ca. 600 submarines. In the period of cold war, the special importance has been attached to missile carrier nuclear submarines (BMNS), which were and are, at present, in the arsenals of 5 countries - Russia, USA, Great Britain, France, China. Whereby, the submarine fleet of the USA and Great Britain consists in 100% of submarines with nuclear propulsion. With the end of cold war, the role of nuclear submarine fleet fell, because the global opposition of big nuclear countries is no longer a major factor of the world policy. The role of non-nuclear submarines (NNS), mainly diesel-propelled, has grown simultaneously. They are the least vulnerable and the most effective in conditions of regional conflicts of small and medium intensity. The potential threat of such conflicts will be of actuality in the nearest years at the Near East, due to control ambitions over the oil transportation arteries (Ormuz strait), in South China Sea oil-field development, between Turkey and Cyprus in Mediterranean, between India and Pakistan in northern part of Indian Ocean. Therefore, in these regions will be a constant demand for the up-to-date diesel submarines.

NNS operate most efficiently in gulfs with mean depth of 300 m, where, in contrast to oceans, the bottom is proxime and produces the operational interference with an active sonar detection. The supplementary noise in coastal waters is generated by passing vessels, as well as living creatures. As a whole, it is seriously difficult to detect a diesel submarine. To NNS disadvantages it is possible to refer relatively smaller speed in comparison with nuclear submarines. NNS generate more noise. Cruising at high speed with electrical batteries supply, NNS has to recharge batteries every several hours. If the submarine is cruising at low speed, the average period of operation of power sources amounts to 4-10 days, in function of its specific characteristics. Therefore, if the enemy is blocking the area of submarine operation during a longer period, NNS becomes extremely vulnerable.

Main NNS-equipped countries and the largest exporters
The largest diesel submarine fleets have Russia, Germanium, France, China, North Korea, the lower in NNS number echelon comprises India (18), Turkey (16), Japan (16), Sweden (12), Norway (12), Greece (10), Egypt (8), Pakistan (7), and Libya (6). The main feature of market geography is the fact that diesel submarine fleets of largest countries are distinctive and differ by the high technological level. The high rates of economic growth of Asian "giants", the increase of their political weight in this region led to considerable increase and modernization of submarine fleets of these countries in recent years. This tendency continues and is a principal item in their defense programs.

Geographic position of countries disposing of the diesel submarine fleet and producing diesel submarines, does not coincide. Until now, a limited number of countries have a large number of NNS and complete infrastructure needed for their production. Countries manufacturing NNS are Russia, Germany, France, China, Sweden, Australia, North Korea, South Korea, Japan, Turkey, Brazil. The most competitive diesel submarines are manufactured in Russia - "Kilo-636", Germany - "Type-209", France - "Agosta-90" They are dominating in the world export. However, more modem models are being manufactured - or their production only begins and some models are already ready for sale. Among them are "Upholder" (Great Britain), "Walrus" (Netherlands), "Collins" (Australia), the new models "Type-212" and "Type-800" Sweden is manufacturing "Gotland" Consequently, principal producers are Russia and European countries, first of all Germany and France

Russia preserves one of leading position in construction and export of up-to-date diesel submarines. The diesel submarine of class "Kilo" keeps place among the first three submarines of this class. The submarine is manufactured by the union "Admiralty Shipyards" at St. Petersburg. A new model "Kilo-636" differs from its predecessor by reduced noise level. As a whole, "Kilo-636" is considered as the most noiseless submarine on the world market. Such a sure position of Russia can be explained by several reasons. Russia occupied traditionally the leading positions in the diesel submarines manufacturing. The production and export of submarines is privileged because the submarine sales are a source of stable currency incomes. According to some sources, Russia is able to manufacture 2 submarines per year, 1 for internal needs and 1 for the export market. Among traditional customers of Russian diesel submarines "Kilo" can be mentioned Libya, North Korea, India, China and Algeria. One of the lastly executed export contracts concerns two submarines "Kilo-877" class supplied to Iran. The main objective of Iran is to set up a control in Hormuz Channel, which conveys a quarter of oil cargoes of the world. In 1995, Russia supplied 2 submarines of "Kilo-877EKM" class to China. China strives for a full autonomy in construction and export of diesel submarines, which is the reason of the contract signed in 1995. It will be, possibly one of the last. In some countries, which previously were exclusively Soviet, and then Russian sector of this market, such as, India, Russia loses its position. So, in 1992-94, India has concluded a contract with German concern "Howaldtswerke Deutschewerft" for supply of 2 and construction of 4 submarines "Type-209". The bribery scandal held up the execution of contract. To India, 2 submarines from planned 6 were delivered, as yet. However, in the next years the contract will be executed. First of all, the substantial part of Indian diesel submarines grew obsolete. India needs updating its fleet, especially in conditions of India-Pakistan conflict. Secondly, India is trying to turn into producer of diesel submarines, and possibly also in future into exporter.

The largest European exporter is Germany. Its diesel submarine Type-209 constitutes in 100 % fleets of such interesting importers as Turkey (10 units), Cyprus (8 units) and all the countries of Latin America equipped with diesel submarine fleet. According to some estimations, NATO countries, first of all Germany, are able to produce 19 diesel submarines per year, whereby the internal needs of NATO countries are 2-3 submarines per year. Consequently, there is a strong need for selling 16-17 remaining units. In order to promote its sales, Germany is using agreements including sales of equipment and know-how for the manufacture of submarines. Such contracts were concluded with South Korea, India and Argentina. Whereby, the latter got the right to re-export two submarines.

At present, France is executing the contract on delivery of three NNS of "Agosta-90" type to Pakistan. Submarines "Agosta-90" are more expensive than its competitors "Kilo-636" and "Type-209" Pakistan is considered as the only country, where France holds a stable position.

China tries to compete with Pakistan by its out-of-date models of submarines of "Romeo" class. These models is successfully sold by China to North Korea. China attempts to make concurrence in those countries, which cannot afford acquisition of submarines of "Kilo" class, "Agosta" or German "Type-209" Sweden with its model "Gotland" is studying the possibility of sales to Malaysia and South Korea. The Netherlands are planning to sell to Taiwan 10 submarines, that probably will be the last wide-scale deal on the market of NNS in this century. Great Britain is seeking a customer for 4 submarines of "Upholder" class.

USA is not a NNS producer. The geostrategic position of country has stimulated the development of programs of BMNS building. USA made steps to change so its vulnerable position on submarines market. In 1994, US State Departments gave the building permit for submarines "Type-209" manufacturing under German license. "Type-209" will be built in shipyards "Inhals" at Passagula (Mississippi). The American license model of "Type-209" will be noticeably lower in cost than German original model. This advantageous feature has already allowed USA to conclude a contract with Egypt for the supply of 2 submarines "Type-209". Taiwan and Saudi Arabia are expected to be the next customers of American "Type-209".

Modification of sales conditions
The financial possibilities of potential buyers in the world market of diesel submarines are obviously limited as compared with the background of total offer. The average value of some submarine as a rule exceeds 200 million dollars. So, according to terms of the contract concluded with France, Pakistan will pay 233 million dollars per each Agosta-90 unit. Today the contractual payments are credited. The second most important feature is wide-spreading practice to transfer the rights on engineering and construction documentation of submarines under terms of export contracts. Consequently, Brazil, Argentina, South Korea and India have been converted from traditional NNS importers into producers. Although today, the quality of their assembling is lower than in leading shipbuilding countries, but in long range perspective they may become their competitors. The problem of transfer of rights on submarines construction is a very sensitive issue. USA is an adversary of this practice. The assembling under license, in its opinion, allows nations of the "third world" to create such technological process, which will permit specific countries in future to create submarines capable to bear the nuclear weapons. However, the protests provoked by the threats to non-proliferation system do not discourage the largest producers, in the first place Germany. On the market of diesel submarines the supply drastically exceeds the demand. Therefore, the sellers are using all possible methods to attract potential importers to buying so expensive products.

Technology development trends
Noise reduction, augmentation of speed and submersion time. For achieving these objectives, the engines are being developed, which would allow NNS to remain under water without frequent recharging of batteries. Today, standard batteries make possible to diesel submarines to stay under water less than 3-4 days. Till 2005, will be elaborated batteries, which will allow diesel submarines to stay under water up to 12 days. A most efficient novelty in today engines of submarines of Russia, Germany, Sweden, Italy and South Korea is their independence from air use (AIP system - Air Independent Propulsion). A future problem to solve by research is an efficient source of power for NNS engines, which would increase the submarine capability to stay under water without refueling. There are projects of creation of engines on liquid oxygen, on chemical liquid fuel.

Consequently, the manufacturers of diesel submarines in the coming decade will solve mainly two problems - a technological improvement of production and the accordance of maximally privileged terms of sales.