Daily Israel Report

Navy Drops US Warship for Made-in-Israel Option

The Israeli navy has dropped plans to purchase U.S. warships and instead is considering starting a home-grown military shipbuilding industry.
By Yehudah Lev Kay
First Publish: 6/29/2009, 9:30 AM

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The Israeli navy has dropped plans to purchase U.S. made warships and instead is exploring the possibility of a home-grown military shipbuilding industry, according to the website of Defense News.

The Ministry of Defense had originally planned on purchasing either the small Littoral Combat Ships (LCS) from Lockheed Martin or similar corvettes built by Northrop Grumman. However, costs for the LCS ships skyrocketed to $637 million, and costs for the corvettes were estimated at $450 million, both deemed prohibitive to the navy.

“As much as we sought commonality with the U.S. Navy, it became much, much more expensive than planned,” a naval source said. “At the end of the day, we had no choice but to face that fact that, for us, it was unaffordable."

Instead, the ministry is now considering building two ships based on the German Meko A-100 corvette at the Israel Shipyards in Haifa, where the project would give a much-needed shot in the arm to the economy.

“One of the things we put on the table is how to vector our urgent operational needs into a project that can support local industry,” the source said. “We believe a strong case can be made for making this into a national project that fosters self sufficiency and provides all the economic benefits that come with creating a military shipbuilding industry.”

The 2,200-ton Meko was designed by the Hamburg-based ThyssenKrupp Marine Systems, which currently builds Dolphin-class submarines for the Israeli navy. The version to be built in Haifa would likely include on-board systems built by the Israel Aerospace Industries.

The main issue which needs to be worked out for the program to take off is how the defense ministry will finance a home-grown ship building plan estimated to cost $600 million.

“If political leaders determine that this is a critical national program, then it’s reasonable to expect significant funding to come from the Treasury,” a second naval officer said.

In addition, the navy is examining how a part of annual U.S. foreign military financing to Israel could be used to fund the project. Israel used part of those funds to finance the locally produced Merkava battle tank, which incorporates raw materials and an engine produced in the U.S.

The price for involving U.S. funds in the plan, however, is a limit on Israel’s ability to export the technology, as is the case with the Merkava.