Military mulls NIS 1b plan to build warships

A new design could give Israel another foothold in the global arms market.

The defense establishment is considering building two future warships for the Israel Navy on its own. The ships will be designed overseas, probably in Germany, but will be built at Israel Shipyards Ltd. in Haifa. Sources inform ''Globes'' that extensive staff work on the matter has been carried out in recent weeks, involving Ministry of Defense director general Udi Shani, senior ministry and IDF officials, and executives of Israel Shipyards.

The staff work examined various aspects of the venture, including its economic feasibility. The cost of the planned project is about NIS 1 billion, which the IDF and Ministry of Defense has allocated for the procurement of new warships for the Navy, as part of the Tefen multiyear procurement program.

The warships will be part of the Navy's "long strategic arm". The Navy's current warships are used for regular security operations on Israel's marine borders, as well as three Saar-5 class corvettes - the INS Eilat, INS Lahav, and INS Hanit - which were delivered to Israel in the early 1990s. The Saar-5 corvettes were developed and manufactured at the shipyards of US defense giant Northrop Grumman Corporation (NYSE: NOC).

The new ships that Israel is considering building will be similar in size to the Saar-5 missile corvettes, and will enable the Navy to expand its strategic operations, fighting capabilities, and long-range firepower. A defense establishment source said that the new ships will be called Saar-5 Mark II, and that they will include more advanced state-of-the-art weapon systems than the Navy's current ships are equipped with.

The defense establishment is currently preparing to build two Saar-5 Mark IIs, but it is possible that the new production line could give Israel another foothold in the global arms market by producing these or similar ships for other countries. Israel is considered a major power in the development and production of weapons and sophisticated combat systems.

Updated figures show that, in 2009, Israel's defense production was about $9 billion, most of which was exported.

The Ministry of Defense told "Globes" in response, "We do not comment on uncompleted staff work."

Published by Globes [online], Israel business news - www.globes-online.com - on August 26, 2010

© Copyright of Globes Publisher Itonut (1983) Ltd. 2010

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