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Sunday, December 20, 2009

Shipbuilders to compete for MSDF submarine contract for first time

In this December, 2007 file photo, the MSDF submarine Soryu is seen at its launching ceremony at the Mitsubishi Heavy Industries Kobe Shipyard. (Mainichi)

It is increasingly likely that in fiscal 2010, defense contractors will have to compete to build a Maritime Self-Defense Force (MSDF) submarine for the first time ever. Mitsubishi Heavy Industries, Ltd. and Kawasaki Shipbuilding Corp. are the only two companies in Japan able to build military submarines, and a possible clash between the two companies over the fiscal 2010 submarine contract is attracting widespread industry attention. "Both companies are in a tough situation with the recession," said one source with a major shipbuilding firm. "To maintain their shipbuilding facilities, certainly both companies would want the order."

According to the Defense Ministry and other sources, under the 1976 National Defense Program Outline, the MSDF retires the oldest of its 16 submarines every year and replaces it with a new one -- with Mitsubishi and Kawasaki taking the order for the new sub in alternating years from fiscal 1977 on. In fiscal 2009, however, the Defense Ministry declared that no submarine would be retired that year and no new vessel would be needed.

This left Kawasaki without an order that year and an empty dry dock -- where more than a year of the four-year building time takes place -- in fiscal 2010, opening the door for competition with Mitsubishi for the 2010 contract. The Defense Ministry has requested 54.4 billion yen in the fiscal 2010 budget estimate for new submarine construction. If Kawasaki Shipbuilding loses the building contract, the company will be without a new order for a total of three years, increasing the risk of losing expert personnel and putting pressure on affiliated businesses. "We're still at the budget request stage, so we cannot comment," Kawasaki Shipbuilding's parent company, Kawasaki Heavy Industries, Ltd. stated. Mitsubishi Heavy Industries also declined to comment. (Original News)
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