Of ESSMs and Nakhodas

JANE'S DEFENCE WEEKLY



- JUNE 20, 2007

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Malaysia poised to bring ESSM aboard new frigates

Richard Scott

Jane's Naval Consultant London

Cost considerations are believed to have favoured the selection of ESSM BAE Systems is looking to sign a contract for the frigate programme by the end of 2007Malaysia looks set to equip its second batch of Jebat-class frigates with the Raytheon RIM-162 Evolved SeaSparrow Missile (ESSM) after the US weapon was selected ahead of MBDA's rival Aster 15 missile system. The move, which remains subject to contract, would mark a significant success for Raytheon given that the Royal Malaysian Navy (RMN) has historically turned to MBDA for the supply of naval guided weapons. BAE Systems received a letter of intent from the Malaysian government in July 2006 confirming plans to acquire two Batch 2 Jebat-class frigates from its Clyde-based shipbuilding subsidiary BAE Systems Surface Fleet Solutions. The company will deliver the so-called Project 'Brave' programme - valued at about GBP700 million (USD1.4 billion) - in conjunction with Malaysian industry partner RealMild, owner of the Labuan Shipbuilding and Engineering (LSE) yard in Sabah. A contract award is expected later in 2007, possibly to coincide with the LIMA 2007 defence and aerospace exhibition on Langkawi Island, Malaysia, in December. The first two Jebat-class frigates, delivered to the RMN in 1999, were equipped with the MBDA VL Seawolf point-defence missile system. However, the staff requirement for the two follow-on frigates specified a more capable and longer-range local area air-defence system. The anti-air missile system was the last major equipment choice outstanding for the Batch 2 frigate programme, with Raytheon Missile Systems and MBDA Missile Systems locked in a fierce dual for the last year. It is understood that while ESSM formed part of the original technical and commercial baseline presented to the RMN by BAE Systems, the customer subsequently endorsed Aster 15 as its preferred technical option after conducting its own performance evaluation and scenario modelling. However, the increased acquisition and integration costs associated with Aster 15 pushed the overall price of the frigate programme significantly above the RMN's budget ceiling. Industry sources have told Jane's that this affordability issue has now seen ESSM reinstated as part of the finalised combat system configuration, with each frigate expected to receive eight Raytheon Mk 56 dual-pack vertical launchers (for a total of 16 ESSM missiles). It is thought that the ships will each be fitted with two continuous wave illuminator-equipped Saab Ceros 200 radar/electro-optical trackers for ESSM guidance and semi-active illumination. The decision in favour of ESSM was the last outstanding major equipment selection for the Batch 2 frigates. Other key systems previously selected are believed to include a variant of the BAE Systems Integrated System Technologies CMS-1 combat management system, the Thales Nederland SMART-S Mk 2 E/F-band multibeam radar and the Thales Underwater Systems Captas Nano low-frequency active/passive towed array sonar. BAE Systems has refused to discuss the outcome of equipment selections for Project 'Brave'. In a statement, the company said that contract negotiations "are progressing well and are ongoing", but added that it was "inappropriate for BAE Systems to comment further". Raytheon and MBDA also refused to comment on the missile selection outcome. Although the technical specification for the Batch 2 Jebat ships is now mature, negotiations are continuing between BAE Systems, RealMild and the Malaysian government to finalise industrial arrangements for the programme. These talks are addressing a range of commercial issues, including the extent of LSE's role in the construction and assembly of the frigates.

And

JANE'S DEFENCE INDUSTRY
- July 01, 2007

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Brunei weighs options for selling on BAE Systems OPVs

Richard Scott Consultant

BAE Systems and Royal Brunei Technical Services have settled a contractual dispute over the delivery of three OPVs Lürssen has been approached to act as a broker for the disposal of the ships The Brunei government is considering options to offload three new 95 m offshore patrol vessels (OPVs) after settling a long-running contractual dispute with builders BAE Systems. With no prospect of the ships entering service with the Royal Brunei Navy (RBN), German shipbuilder Lürssen Werft has been approached to act as a broker for the onward sale or lease of the ships. The former Yarrow Shipbuilders now subsumed in BAE Systems Surface Fleet Solutionswas selected in July 1995 as shipbuilder and prime contractor for the three F 2000-type OPVs under a memorandum of understanding signed between Brunei and the UK. A contract worth more than GBP700 million (USD1.4 billion) was awarded in January 1998 following protracted negotiations. First-of-class Nakhoda Ragam was presented for acceptance in December 2003. The second ship Bendahara Sakam completed its trials programme in May 2004, with the third and final ship Jerambak presented for acceptance in December 2004 following conclusion of its trials programme. However, Royal Brunei Technical Services Sdn Bhd the Brunei government's procurement agent refused to take delivery of the ships on the grounds that they did not meet contract specifications. BAE Systems, which insisted that the three vessels had demonstrated contracted performance, subsequently instigated legal proceedings. A closed hearing was held at the International Court of Arbitration in London in June 2006. A judgement had been expected by the end of last year but in the event the court's adjudication was set aside to allow the two parties to engage in further out-of-court negotiations. In a statement released to Jane's, a BAE Systems spokesman said that the company and Royal Brunei Technical Services "have reached an amicable conclusion to issues related to the contract for the supply of three OPVs". The spokesman declined further comment. It is understood that Brunei has taken formal delivery of the ships, but has no plans to commission the ships into the RBN. Furthermore, rather than engage BAE Systems or the UK Ministry of Defence (MoD) as an agent to re-market the ships, Royal Brunei Technical Services has turned instead to Lürssen to explore opportunities for onward transfer to a third party. Neither the Brunei MoD nor Lürssen have responded to Jane's requests for comment. While ship brokerages are commonly used for the sale of merchant and recreational vessels, it is exceptionally rare for a commercial agent to be appointed to sell on naval ships. This is because of the need to fully satisfy end-user licensing controls requiring any purchaser to be approved by the government that sanctioned the original export contract and the requirement for any purchaser to be assured of long-term support from the design authority and specialist original equipment manufacturers. All three OPVs currently remain alongside at BAE Systems Surface Fleet Solutions' Scotstoun yard in Glasgow. The company has maintained the vessels on a care and maintenance basis throughout the duration of the dispute, with each ship being taken to sea at six-monthly intervals.

Huh, the two recent news above has started forumers’ tongues wagging….one on why the ESSM was and rather will be selected and two, if we are going to buy over the Nakhoda class corvettes.

On the first issue, my take on this is no surprise. Raytheon has been marketing their ESSM solution to the navy since the PV project so long ago, so it seems that the navy may have decided to standardize their SAM equipment for both the new frigates and PVs, specifically the second batch AAW squadron. This will leave the Seawolf missile as an anomaly in the navy’s system, so it seems that the system will be superceded by the ESSM instead. That is unless the navy suddenly decided to buy over the Nakhodas that has the system on board, that it makes sense if five naval units continues to carry the system. Anyway even though I cannot it, if we do purchase the ESSM I hope the Mk56 launcher unit can handle the Aspide as a last ditch back-up, in the unlikely event that we cannot source the missiles from Raytheon directly, as we should still be able to source it from the NATO ESSM Consortium if their congress stops such sales.

This prospect has actually caused forumers to salivate on whether the navy will expand their fleet with these capable corvettes. I do not put it above the navy to do so although there is no budget for those ships in the 9MP, as there is always the defence slush fund to depend on. The Laksamana class corvettes are a reference case on such purchases. Even though some may call this an unplanned purchase and thus unwise, I would think that the navy would have put this prospect on the consideration agenda once they knew of RBN’s plans not to accept the ships into their fleet. As I understand it, the RMN was a consultant on this purchase, so they would know the details much earlier than the public. It is just that the purchase price may be too high for us, as other countries have more critical needs to acquire these ships than the RMN. Nigeria, Pakistan and Thailand are a few navies that are on the market for such vessels for immediate delivery but have been unsuccessful in their dealings with the British for second hand vessels thus far, so I presume they would jump at this chance to purchase these pre-used vessels. “Hardly been used and only driven on Sundays” a second-hand dealer would say he!he!he!. Thus I do not put any hope on us acquiring the vessels, but I would be happy to be proven wrong anyway.