Israeli Navy to Wait Years for Warships to Defend Gas Rigs

The Israel Navy is still waiting for the new warships designed for the defense of Israel’s economic waters. After examining possible procurement of the new ships from Germany, South Korea, and the US, and even Israel Shipyards, the Ministry of Defense published an international tender several weeks ago inviting companies in the industry to present price bids. It is believed that the stage of opening the envelopes in the new tender will take place only at the end of the week, and that the decision will be taken only next year. It should be kept in mind that building the ships, adapting them to the Israel Navy’s operational requirements, and declaring them operational is liable to take several years after a decision is made.

The Ministry of Defense wants to procure four advance patrol vessels for the Navy that will ensure an extensive protective envelope for the natural gas infrastructure in the Mediterranean Sea against a broad range of threats. These include deadly shore-based Yakhont missiles that Hezbollah is believed to possess, which pose a threat to the gas drilling platforms, as well as vessels in Israeli territorial waters. The ships to be procured are designed to carry advanced defense systems, including a new generation of Barak missiles produced by Israel Aerospace Industries Ltd. (IAI) (TASE: ARSP.B1), which can intercept Yakhont missiles.

The Defense Ministry’s discussions of the urgent need to equip the Navy with the new ships began five years ago: procurement plans were raised and rejected, mainly for budgetary reasons. Senior naval officers made it clear several times in the past that the existing equipment could not provide absolute protection for Israel’s economic interests in the Mediterranean Sea. State Comptroller Judge (ret.) Joseph Shapira published an audit report on the Defense Ministry in March, in which he criticized the Defense Ministry and the Prime Minister’s Office National Security Council for the delays in the plan. He said that due to foot-dragging by government ministries, the gas facilities in the Mediterranean were only partially protected, although they constituted a target for attacks by terrorist organizations.

The cost of the plan for procuring the new ships was previously estimated by Navy officers at over NIS 2 billion. The Navy last year considered the possibility of purchasing skeletons of civilian ships and adapting them to its operational needs, after installing radar, command and control systems and advanced firing systems on them. The Defense Ministry later conducted a comprehensive examination of procurement of the new ships from Germany, with the German government bearing part of the cost. These negotiations were unsuccessful, and the plan did not go through. Israel and Germany have cooperated for many years in Israel’s procurement of Dolphin submarines manufactured in Kiel Shipyards. The German government participates in the cost of the submarine plan.

The Defense Ministry said, “The Ministry has been preparing for a number of years an international tender for the procurement of ship to operate in Israel’s marine economic area, and has done in-depth staff work in the matter. The government decided to procure the ships only in November 2013, and provided a special budget for them. Procurement was suspended in order to provide enough time for negotiations for a deal with a foreign country. Last July, following the prolonging of these processes, the Defense Ministry decided to issue an international tender for procurement of the ships. The tender is currently taking place; the envelopes will be opened next December, and a preliminary answer will be given. The tender will be completed by the end of 2015.”

Published by Globes [online], Israel business news – www.globes-online.com