ANKARA - A 2 billion-euro ($2.7 billion) deal between Turkey's arms procurement agency and Germany's ThyssenKrupp Marine Systems for the joint manufacture of six submarines formally took effect July 1, the German group announced.
"The 2 billion-euro order for six U214 submarine material packages placed with ThyssenKrupp Marine Systems by the Republic of Turkey has entered into force with receipt of the advance payment," the group said in a statement July 1.
"As a longstanding partner and supplier to the Turkish Navy, ThyssenKrupp Marine Systems can now begin executing the order," the statement said. "The order will contribute to securing employment at [ThyssenKrupp's] HDW in Kiel, as well as at many subcontractors in Germany and Turkey, for the next 10 years."
A major loan deal on the last day of 2010 between German banks and the Turkish Treasury rescued the contract between the Undersecretariat for Defense Industries, the Turkish government's procurement agency, and German shipyard Howaldswerke Deutsche Werft (HDW), Turkish procurement officials said earlier. Since then, the two sides had discussed the loan's conditions, and that process ended successfully in late June.
Turkey and HDW, an affiliate of the ThyssenKrupp conglomerate, originally signed the submarine contract in July 2009, but no price was disclosed at the time. Turkey originally selected HDW over French and Spanish rivals in the summer of 2008, when officials said the German offer was worth 2.5 billion euros.
Renegotiations over price and a clear road map for Turkish local participation led to a final agreement on a price reduction of more than 500 million euros, bringing down the program's final cost to about 2 billion euros.
Under the Turkish modern submarine program, the non-nuclear vessels will be built at the Navy's Golcuk Shipyard on the Marmara Sea coast near Istanbul. The submarine program will become Turkey's largest defense modernization project after a planned $13 billion deal to buy 100 next-generation F-35 Joint Strike Fighters for the Air Force.
Ankara is hoping the U214 submarines will enter service shortly after 2015, two years later than the original schedule when the program was launched a few years ago.
With a decision to proceed, Turkey scrapped a modernization plan for its older Ay-class submarines, also built by HDW.
Turkey also is building its own corvette-type ships and hopes to produce its own frigates by the end of this decade. Several Turkish shipyards are producing patrol boats, coast guard boats and other amphibious platforms.
"The 2 billion-euro order for six U214 submarine material packages placed with ThyssenKrupp Marine Systems by the Republic of Turkey has entered into force with receipt of the advance payment," the group said in a statement July 1.
"As a longstanding partner and supplier to the Turkish Navy, ThyssenKrupp Marine Systems can now begin executing the order," the statement said. "The order will contribute to securing employment at [ThyssenKrupp's] HDW in Kiel, as well as at many subcontractors in Germany and Turkey, for the next 10 years."
A major loan deal on the last day of 2010 between German banks and the Turkish Treasury rescued the contract between the Undersecretariat for Defense Industries, the Turkish government's procurement agency, and German shipyard Howaldswerke Deutsche Werft (HDW), Turkish procurement officials said earlier. Since then, the two sides had discussed the loan's conditions, and that process ended successfully in late June.
Turkey and HDW, an affiliate of the ThyssenKrupp conglomerate, originally signed the submarine contract in July 2009, but no price was disclosed at the time. Turkey originally selected HDW over French and Spanish rivals in the summer of 2008, when officials said the German offer was worth 2.5 billion euros.
Renegotiations over price and a clear road map for Turkish local participation led to a final agreement on a price reduction of more than 500 million euros, bringing down the program's final cost to about 2 billion euros.
Under the Turkish modern submarine program, the non-nuclear vessels will be built at the Navy's Golcuk Shipyard on the Marmara Sea coast near Istanbul. The submarine program will become Turkey's largest defense modernization project after a planned $13 billion deal to buy 100 next-generation F-35 Joint Strike Fighters for the Air Force.
Ankara is hoping the U214 submarines will enter service shortly after 2015, two years later than the original schedule when the program was launched a few years ago.
With a decision to proceed, Turkey scrapped a modernization plan for its older Ay-class submarines, also built by HDW.
Turkey also is building its own corvette-type ships and hopes to produce its own frigates by the end of this decade. Several Turkish shipyards are producing patrol boats, coast guard boats and other amphibious platforms.
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