Taiwan has taken another step towards building its own submarines, appointing a Gibraltar-based defence consultancy to oversee the preliminary design of the NT$49.4 billion (US$1.6 billion) project by March.

Gavron Limited was awarded the contract to supervise the design work, which will be carried out by Taiwanese shipbuilder CSBC Corporation, the island’s navy confirmed on Tuesday.

“Seven foreign companies submitted bids [for the contract] and after comparing and checking their capital, technicians, export permits and other qualifications, only GL had the [required] export permit,” the navy said in a statement.

It said the NT$600 million contract was awarded by CSBC in line with government procurement and bidding process rules.

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Taiwan’s indigenous defence submarine (IDS) programme is a key part of President Tsai Ing-wen’s defence policy in the face of mounting tensions across the Taiwan Strait. It aims to build a fleet of eight diesel-electric submarines to replace the navy’s four ageing vessels to boost Taiwan’s defences as Beijing ramps up pressure on the island.

Beijing sees Taiwan as a renegade province to be reunited with the mainland, by force if necessary. Ties have deteriorated since Tsai took office in 2016 and refused to accept the “one China” principle, with Beijing suspending communications with the self-ruled island and trying to isolate Taipei, poaching five of its diplomatic allies. Mainland China has also increased military patrols and drills around the island.

Under the submarine plan, design of the prototype is to be completed by March, with construction to begin before 2020 and the first vessel to be built by 2025, the navy said.

It also attempted to distance itself from the submarine deal after Taiwanese lawmakers raised concerns about possible irregularities in the bidding process.

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“The navy has had nothing to do with the deal as it was done by CSBC and all interested bidders directly,” the statement said, referring to the contract to supervise the design work.

It added that the navy had not been directly involved in the process after the shipbuilder was awarded the NT$2.5 billion design contract earlier this year.

In July, local media reported that Taiwan had received bids for the contract to oversee the design from six foreign companies – two European firms, two from the United States, one from India and one from Japan.

Local media are now questioning why such an important contract – whose key task is to advise whether the design is good enough to build the submarine – went to a small consultancy like Gavron and not a big company like US-based Lockheed Martin.

Lawmakers Johnny Chiang Chi-chen and Ma Wen-chun also raised the issue in a legislative session on Monday.

Military expert Mei Fu-hsing said Gavron’s export permit was the key to its success. He added that the company’s task was to ensure the design work met the required standard, and there was no reason the tender process should be viewed with suspicion.

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Meanwhile, CSBC chairman Cheng Wen-lung said there would be no problem for his company to design and build the main submarine structure.

“CSBC has more than 370 designers – about 70 per cent of the talent in this field from all over Taiwan,” he said, adding that while the hull and platform of the vessel could be built by Taiwanese experts, foreign suppliers would be needed to take care of other equipment and facilities.


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