Korean-made submarine to be built on Indonesian soil

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South Korea clinched a $1.1 billion deal to supply three submarines to Indonesia, beating tenders from France, Germany and Russia, because its offer included technology transfer, authorities said Thursday.

"South Korea has advanced technology and they are open to a technology transfer, while the other countries in the tender were only focused on selling the submarines," defence ministry spokesman Hartind Asrin told AFP.

South Korea won the tender Tuesday over France, Germany and Russia, according to the ministry, in its largest-ever weapons export deal.

It will allow Indonesian company Penataran Angkatan Laut (PAL) to observe how the vessels are built and to assemble the third in Indonesia.

"Under the contract, two submarines will be built in South Korea and the third one will be built at PALs facilities in Surabaya in East Java," Asrin said.

It is the second major defence deal between the two countries. In May, the state-run Korea Aerospace Industries (KAI) agreed to export 16 supersonic T-50 Golden Eagle trainer jets worth $400 million to Jakarta.

The 1,400-tonne submarines will have a capacity of 40 personnel and come equipped with eight weapons tubes for torpedoes and guided missiles.

Daewoo Shipbuilding and Marine Engineering will build the vessels, with the first expected to arrive in 2015 and the last built by 2018.

Daewoo has the second-biggest shipyard in the world after South Korea's Hyundai Heavy Industries.

The deal brings the volume of South Korea's defence exports this year to an all-time record $2.4 billion, more than double the amount from a year ago, South Korea's Defense Acquisition Program Administration said.

The two nations agreed to boost defence industry trade at a bilateral meeting last month, despite a hiccup in bilateral weapons trade earlier this year.

South Korea's spy agency came in for criticism in February following reports that its agents tried to steal commercial secrets from the hotel room of a visiting Indonesian trade delegation.

Newspapers said three agents from the National Intelligence Service entered the room on February 16 in an attempt to steal information on possible Indonesian arms purchases, but were caught by a delegate as they copied files from a laptop computer.

© 2011 AFP

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