Netherlands confirms €5.4 billion submarine contract awarded to French firm Naval

The Dutch Cabinet confirmed it selected the bid from French shipmaker Naval Group to build four new submarines for the military. The 5.4 billion euro deal was announced by State Secretary Christophe van der Maat jointly with the Dutch Navy at an event in Den Helder. The French firm is partnered with Dutch shipyard Koninklijke IHC on the project. Not everyone was happy with the decision, as Dutch shipmaker Damen's bid with Saab lost out.

The submarines will be provided with the newest technology and a powerful new weapons system. This could result in cruise missiles being fired at a distance far from the coastline while still underwater. The new submarines will replace the Walrus class submarines that have been in service since 1992. The first two new boats should be operational in the period 2034-2037.

The minister announced the names of the new submarines alongside the youngest sailor and officer of the submarine service. The names will be Orka, Zwaardvis, Barracuda, and Tijgerhaai, the Dutch words for an orca, swordfish, barracuda and tiger shark.

It was leaked earlier in the week that Naval would receive the assignment. There was opposition from the Tweede Kamer, the lower house of Parliament, upon hearing the news. Several parties wanted Damen to get the assignment in cooperation with the Swedish company Saab. The SGP submitted a proposition to leave the decision of awarding the contract to the new Cabinet, but a majority was not in favor.

Van der Maat said that the French company made the best offer. “That means they will build the best boat for the best price. In addition, a large role has been put aside for our own industry and knowledge institutions. This pertains to the construction and the maintenance. As we get the usage rights, we can do the maintenance to the systems ourselves and involve Dutch companies in doing so.” He emphasized that this would be good for safety purposes but also for the Dutch naval industry.

“It is a sad day. Awarding the most innovative Dutch maritime project to a French state-owned company takes the foundation away from our complete and well-functioning Dutch naval construction,” Damen said in response to the news.

Damen says the decision will also affect the so-called sector agenda of the maritime manufacturing industry, in which the government and the ship-making companies have agreed to try to improve innovation in the industry. “Despite this disappointing result, we are ready to support the Royal Navy with designing, building, and maintaining their navy ships,” Damen emphasized.

The total project cost will amount to 5.6 billion euros, and a “significant” portion of the tender will be paid to Dutch companies, amounting to “hundreds of millions of euros,” said Economic Affairs Minister Micky Adriaansens. She added that the industry will benefit greatly from shared knowledge and experience, despite Damen’s suggestions otherwise, and this alone is worth “billions.” Aside from beating out the Damen-Saab joint bid, Naval and IHC also was selected over German contractor Thyssenkrupp Marine Systems.

Adriaansens is “really very happy with the deal, because the Dutch industry has a good position in it,” and the contractor will be bound by those terms. When the contract is ultimately awarded, Naval Group will have to agree to the minimum amount of money that will be spent in the Netherlands as part of the assignment.

The caretaker minister emphasized repeatedly that the Cabinet has gone through a “very careful process.” The aim was to find the “best boat for the best price, in which Dutch industry is well involved.” She said the selection process was “very careful,” and thought it was “very strange” that critics would now suggest postponing the deal at the risk of portraying the Dutch government as lacking in stability.

One of the Dutch firms set to benefit is Koninklijke IHC. The firm, based in Kinderdijk, partnered with Naval Group on the bid. “We also congratulate all those Dutch companies that can contribute to this strategic project for the Netherlands and are happy with the choice for the Dutch maritime ecosystem,” IHC said in a statement. “The choice is good for the preservation and further development of Dutch knowledge, employment and economy.”

IHC and Naval did not disclose the companies they will use as sub-contractors for the project, because the information is confidential. IHC cited security reasons for not revealing their own tasks, as well.

A spokesperson for Naval said that there has been a long-standing collaboration with Dutch suppliers and that Naval has sent hundreds of millions of euros in orders to the Netherlands in recent years. He said the Netherlands has a “highly valued” maritime technology industry.