Type 209 diesel-electric attack submarine
Sources: Wikimedia Commons

Indonesia bought two Type 209/1300 submarines from Howaldtswerke-Deutsche Werft (HDW, Germany) in 1981. During the last three decades of service, Cakra 401 and Nanggala 402 underwent major refits on different occasions, initially by HDW and later through South Korea's Daewoo Shipbuilding & Marine Engineering (DSME). The refit undertaken by HDW included "new batteries, overhaul of engines and modernization of the combat system."[1] DSME later overhauled Cakra 401 between 2005 and 2006, and is currently working on Nanggala 402's refit.

In 2003, TNI-AL awarded the US$60 million refit contract of Cakra 401 to DSME.[2] The overhaul focused on "repair and maintenance of the submarine's four engines, propulsion system and hull, as well as the installation of new radar, sonar, navigation and fire-control systems;"[3] the revamped submarine was delivered to Indonesia in 2006.[4] Jakarta based Antara News reported that the upgrade focused on replacing the 1970 technology in Cakra 401 with technology of the 1990s.[5] In 2008, the Defense Ministry shortlisted Germany's HDW and South Korea's DSME for the overhaul of Nanggala 402. In April 2009 DSME won the $75 million submarine overhaul contract, which involved replacing major equipment, including radar, sonar and combat systems.[6]

Over the past five years, Jakarta has made multiple attempts to procure additional submarines. In 2008, media reports indicated Indonesia was completing a barter deal with South Korea for two attack submarines in exchange for eight Indonesian-built advanced maritime patrol aircraft,[7] but the deal did not materialize. In 2009, Indonesia dispatched submarine tender requests to submarine manufacturers in France, Germany, Russia and South Korea.[8] Russia and South Korea emerged as frontrunners for the contract. During this period, Russia reportedly offered a one billion USD loan for Jakarta's armament procurement between 2007 and 2010. Along with helicopters, fighters, and infantry armored vehicles, the loan could have been used for purchasing two Kilo-class submarines.[9] However, the Ministry of Defense cancelled the tender due to insufficient financial resources. Since mid-2010, it has been widely expected that Indonesia would issue a new tender for submarines. In September 2010, Jane's reported that Indonesia's Ministry of Defense planned to purchase five submarines worth USD350-400 million each by the end of 2010 to strengthen maritime security in Indonesian waters,[10] however, the tender was never issued.

In January 2011, Antara News reported that Admiral Soeparno, TNI-AL chief of staff, stated the submarine acquisition program has accelerated and has a budget of USD 700 million.[11] The Indonesian Ministry of Defense signed a contract with South Korea's Daewoo Shipbuilding and Marine Engineering (DSME) in December 2011 to supply three Type 209/1200 diesel-electric attack submarines by 2020. According to Jane's, under the estimated USD 1.1 billion deal, the first two submarines will be built in South Korea, while DSME transfers the technology and know how to enable the third to be built by PT Pal, Indonesia's state-owned shipbuilder.[12] Crucial to DSME's successful bid was its willingness to accommodate Indonesia's preference for a high level of indigenous input and technology transfer.

Sources:
[1] Koh Swee Lean Collin, "Indonesia's Submarine Play," The Diplomat, 19 January 2012, http://thediplomat.com.
[2] "Daewoo Shipbuilding delivers revamped submarine to Indonesia," Yonhap News Agency of Korea, 3 April 2006.
[3] "Submarine Forces: Indonesia," Jane's Underwater Warfare Systems, 25 January 2011, www.janes.com.
[4] "Daewoo Shipbuilding delivers revamped submarine to Indonesia," Yonhap News Agency of Korea, 3 April 2006.
[5] "Two foreign companies shortlisted in submarine overhaul tender," Antara News, www.indonesiaseoul.org.
[6] "DSME Wins $75 Million Worth of Indonesian Submarine," The Korean Gas Union Newsletter, 8 May 2009, www.kgu.or.kr.
[7] Jung Sung-ki, "S. Korea to Ink Subs-for-Aircraft Deal with Indonesia," Korea Times, 30 June 2008, www.koreatimes.co.kr.
[8] Jon Grevatt, "Indonesia moves closer to submarine acquisition," Jane's Defence Industry, 27 January 2011.
[9] "Indonesian forces to acquire 1bn dollars-worth of Russian equipment," BBC Monitoring Former Soviet Union, 21 August 2007, Proquest.
[10] "Submarine Forces: Indonesia," Jane's Underwater Warfare Systems, 25 January 2011, www.janes.com.
[11] Jon Grevatt, "Indonesia moves closer to submarine acquisition," Jane's Defence Industry, 27 January 2011.
[12] Jane's World Navies, "Indonesia," 29 October 2012, IHS Jane's.