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Brazil and France has signed an agreement that involves the construction of 4 diesel-electric submarines (SSK), plus assistance in developing and fielding the non-nuclear parts of 1 nuclear fast attack submarine (SSN). Key specifics, such as the presence or absence of Air Independent Propulsion technologies, have yet to be made public, but the terms of the agreement leave the possibility open. Reports regarding the submarine deal’s value have varied, but the budget is now set at almost EUR 7 billion.

Brazil is not alone in looking to modernize its submarine fleet. On the west side of the continent, Chile now fields DCNS/Navantia’s new SSK Scorpene class as the O’Higgins class. Brazil’s neighbor Venezuela is also looking to boost its sub fleet, but plans to use Russia’s SSK Kilo class instead. Brazil’s submarines are seen as a key part of the country’s new national armaments and defense strategy, which was released on Dec 18/08. It places a higher priority on protection of Brazil’s offshore energy reserves, and sees submarines as key players in that effort. The experience of the 1982 Falklands War, in which Argentina’s entire fleet was kept in port by Britain’s nuclear fast attack boat HMS Conqueror, is often cited as instructive.

Financing now appears to be in place, and recent releases explain the budgets, the timing, and some of the key players in Brazil’s Prosub program…

• The Boats [NEW]
• Contracts and Key Events [updated]

The Boats

Future: Scorpene class
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The submarines will be built by Itaguai Construcoes Navais, a joint venture of Brazil’s Oderbrecht and France’s DCNS. The program is expected to provide employment for over 700 people in Brazil over a period of 15 years.

The 4 diesel-electric submarines will be variants of the French/Spanish Scorpene design, which has also been sold to Chile (O’Higgins class), India, and Malaysia (Tunku Abdul Rahman class). The coming design phase will establish the level of Brazilian technology inserts and development work, as opposed to license construction and technology transfer.

It will also establish the submarine’s key characteristics. The stretched AM-2000 version of the Scorpene ordered by India can use French MESMA air-independent propulsion, allowing the submarines to remain underwater longer without coming up to snorkel air into their diesel engines. This is always the most vulnerable period for a submarine, which can be spotted by radar and other surface surveillance techniques.

Expected Scorpene costs are currently EUR 415 million (currently about $592 million) per boat, and the level of customization required will determine the project’s overall risk profile. This is similar to India’s budget of about $3.5 billion for an even mix of 3 CM-2000 and 3 AM-2000 Scorpene submarines, or $583 million or so per boat. The 1st diesel-electric sub will begin construction in 2011, with an expected in-service date of 2015; submarines #2-4 will enter service in 2017, 2019, and 2021.

According to Brazil’s MDD, the nuclear-powered submarine will be far larger, at 6,000t compared to the diesel-electric boats’ 1,400-1,800 tonnes. This is significantly larger than France’s existing SSN Rubis Amethyste class fast attack boats, which weigh in at around 2,730t submerged, and remains larger than France’s planned 5,300t SSN Barracuda class. Some of this can be accounted for by the need for more space, in order to accommodate larger early-stage nuclear propulsion systems. Even so, the famous USS Nautilus managed to displace only 3,500 tons. The most similar size analogues to Brazil’s proposed submarine is the India’s new Arihant class SSBN, which would raise questions concerning Brazil’s long-term nuclear intentions. Since nuclear weapons are specifically prohibited by Brazil’s current constitution, however, a large SSN fast attack vessel is almost certainly the goal. A 6,000t vessel would fit somewhere between France’s new SSN Barracuda class, and the USA’s 6,450t SSN Los Angeles class.

Construction of Brazil’s nuclear boat is expected to begin in 2015, and it’s expected to enter service in 2021. Cost for the submarine is pegged at about EUR 2 billion, with EUR 1.25 billion assigned to Brazil’s indigenous Project Aramar nuclear propulsion/ power program. DCNS’ role involves assistance with hull technology and construction, and with non-nuclear internal technologies.

Finally, Brazil aims to set up improved naval construction facilities and a base capable of handling nuclear submarines at Itaguai, a port just south of Rio. Brazil’s U209 submarines are currently based out of Rio de Janeiro, but that densely populated city offers too many technical and environmental issues to host nuclear-powered submarines. These construction projects are expected to cost EUR 1.868 billion (6.9 billion Reals). The nuclear submarine base will be built by a consortium (Sociedade de Proposito Especifico, or SPE), which includes Brazil’s Odebrecht (50%), France’s DCNS (49%) and the Brazilian Navy (1% “golden share,” with veto power).

Contracts and Key Events

Chile’s SS O’Higgins
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The submarines will be built by Itaguai Construcoes Navais, a joint venture with an initial capital of 10 million reals that will be responsible for management control. Odebrecht has a 59% interest, and DCNS the remaining 41%.

Sept 2/09: Brazil’s Ministerio Do Defesa announces [in Portuguese] Senate approval of the long term budgets for Brazil’s helicopter and submarine programs. The Prosub program’s budget is EUR 6.79 billion (about $19 billion Reals, or $9.7 billion) and runs from 2009-2024. EUR 4.324 billion of this total will be paid for with 20-year financing from BNP Paribas S.A, Societe Generale, Calyon S.A. Credit Industriel et Commercial, Natixis, and Banco Santander.

The announcement confirms that the diesel-electric submarines will be modified Scorpene class boats, with technology inserts and work for over 30 Brazilian firms. Brazilian manufacturers of technologies like advanced valves, pumps, water and air purification, etc. can be expected to see especial benefits. The nuclear-powered submarines will be far larger, at 6,000t compared to the diesel-electric boats’ 1,400-1,800 tonnes. France will transfer the technology necessary for submarine design and construction, as well as design and construction of the shipyard and naval base – but not nuclear propulsion technologies. Brazil’s Ministerio Do Defesa [in Portuguese] | MDD on JV Agreement [in Portuguese] | DCNS release | MercoPress | MercoPress re: France’s consolidation as naval supplier.

Aug 25/09: Venezuela’s Latin American Herald Tribune cites the Folha de Sao Paulo newspaper, and reports that Brazilian President Luiz Inacio Lula da Silva has approved a strategic plan for the defense of the Amazon and Brazil’s offshore oil fields that includes the 5-submarine project, along with military and procurement reorganizations, and the restoration of Brazil’s arms industry. The proposal will now be submitted to Congress, Brazilian media reported.

July 21/09: France’s state-owned DCNS Group (DCNS) acquires a stake in Itaguai Construcoes Navais SA, which will build military naval vessels (at present, submarines). Source.

April 16/09: Forecast International relays a Defense News report, which says that financing is secure based on “an authorized French source” at the 2009 at the Latin American Aerospace and Defense Show. BNP Paribas, the leading lender in the deal, reportedly asked for a state-backed guarantee from the French, who provided the guarantee through the export credit agency COFACE. That covers 70% of the total, with the other 30% reportedly coming from the Brazilian government.

The report also claims that the deal involves 4 Scorpene Class submarines, and that the total value is $8.8 bllion. On the other hand, earlier reports had placed the deal’s value at a similar number of Brazilian Reals, not dollars, and the selection of the Scorpene Class has yet to be confirmed in official releases.

Feb 26/09: Brazil’s Folha de Sao Paulo reports that Brazil is seeking 8.5 billion reals (about $3.6 billion) to build 1 nuclear-powered and 4 diesel-electric fast attack submarines. The report also cites unidentified navy officials, who say that the global credit crunch may jeopardize the financing required to execute that deal. Bloomberg News.

Rubis Amethyste Class
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Dec 22/08: The purchase agreement is announced. While reports point to DCNS’s Scorpene Class as the conventional submarines, additional details in DCNS’ delayed release may contradict this:

“DCNS will act as prime contractor for four conventional-propulsion submarines to be built by the Joint Venture that will be set up by DCNS and Brazilian partner Odebrecht. The submarines will be designed in cooperation with Brazilian teams under DCNS design authority to meet the Brazilian Navy’s specific needs: They will be ideally suited to the protection and defence of the country’s 8,500 km coast. The first submarine is scheduled to enter active service in 2015. DCNS will produce key advanced-technology equipment in its own plants.”

It is not uncommon for joint ventures of this sort to build an established design with some local electronics et. al. swapped in, or to begin with an existing design on the way to a new ship class. A DCNS joint venture with India is already building Scorpene Class boats, for instance, while Singapore’s Formidable Class stealth frigates are one of several ship classes around the world based on DCNS’ LaFayette Class.

DCNS will also provide design assistance to build “all portions of Brazil’s new SSN class, except for the nuclear plant.” The key question will be how much commonality Brazil’s new SSN and SSK boats will share. If commonality is desired, DCNS has an obvious option at hand – and it is not the Scorpene. France’s current Rubis Amethyste class SSNs are scheduled for replacement by the forthcoming Barracuda class, but the design has already been converted to a conventional counterpart in the Turquoise class diesel-electric submarine. Using the Amethyste/Turquoise design as a base would allow Brazilian sailors to train on existing French nuclear vessels, while delivering a proven nuclear design, and providing the first export orders for the Turquoise class.

The third component of the deal involves “prime contractor assistance to Odebrecht,” as they build the shipyard that will build all 5 submarines and a naval base for the Brazilian Navy. French government | DCNS | AP | Bloomberg | Reuters UK

Dec 18/08: Brazil releases its national defense strategy, which calls for greater surveillance capabilities over the amazon, protection of its deepwater offshore oil reserves, and the rejuvenation of its defense industrial base. AP report | Estrategia Nacional de Defesa [Portuguese]

Additional Readings

• Brazil – Estrategia Nacional de Defesa [Portuguese]

• Click Macae (July 19/09) – Naval Industry, the new strength of Rio de Janeiro state economy. Including Itaguai.

• US Naval Institute Proceedings (June 2009) – Why Does Brazil Need Nuclear Submarines? An in-depth look at various rationales by former U.S. Ambassador and US Navy veteran Paul D. Taylor, who is currently a senior strategic researcher in the U.S. Naval War College’s Center for Naval Warfare Studies.

• Reuters UK, via Key Publishing (Oct 11/08) – Experts say Brazil-France defence pact wrong choice. Arguments made concerning the logic of nuclear submarines.

• DID (Jan 17/08) – Brazil Seeks Sub Fleet Combat System Upgrades. For its existing U209-1400 Tupi/Tikuna class.