Thu, Mar 14, 2002 - Page 2 News List

US firm buys submarine maker

AFP , TAIPEI

The American acquisition of the German shipyard Howaldswerke-Deutsche Werft (HDW) may help remove the barriers to Washington's sale to Taiwan of eight conventional submarines, military experts said yesterday.

One Equity Partners, the private equity arm of Bank One Corporation of the US, on Tuesday acquired a 75-percent stake of HDW -- the builder of the German 209-class submarine favored by the Taiwanese navy.

The deal caught the limelight in Taipei, with analysts saying it could be part of US efforts to honor its commitment to help arm Taiwan.

US President George W. Bush in April last year approved the sale of eight diesel-electric submarines as part of Washington's most comprehensive arms package to Taipei since 1992. But the US has not built conventional submarines for more than 40 years and designing an entirely new one would be prohibitively expensive.

To help the clarify the situation, the US Navy set up a Team Diesel Submarine group last September, according to Jane's Defence Weekly.

"Bush might not think it would involve so many problems when he announced the arms sale," said Wung Ming-hsien (翁明賢), head of Tamkang University's Graduate Institute of International Affairs and Strategic Studies.

The most likely solution would involve foreign participation, but the German government has said they would not get involved in arms sales to Taiwan, which Beijing regards as part of its territory to be unified with the mainland by force, if necessary.

"One of the possible solutions could be HDW building compo-nents to be assembled in the US," Wung said.

Still, military analysts said Germany's official nod remained a requirement despite the US takeover of the German shipyard.

"I doubt that the German government would issue the export license, given Germany's huge interests in the mainland," said Keven Cheng (鄭繼文) of Defence International magazine.

Jane's says several submarine builders including HDW and Northrop Grumman had submitted concept papers to the US Navy's International Programs Office, which supervises Taiwan's submarine deal.

Cheng said a bundle of problems need to be tackled for foreign participation in the arms deal.

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