Submarine Proliferation

Netherlands Export Behavior

Capabilities | Import | Export

The Dutch shipbuilding industry is comprised of numerous yards, however, only Rotterdamsche Droogdok Maatschappij Submarines B.V. (RDM) and the Wilton Fijenoord shipyard have constructed submarines. But the latter closed its submarine division due to lack of orders in 1988, leaving RDM as the sole supplier of the Royal Netherlands Navy (RNLN).[1]

Rotterdamsche Droogdok Maatschappij Submarines B.V.

RDM currently offers two types of submarines for export:

Zwaardvis-class: used diesel-electric patrol submarines, decommissioned in the mid-1990s following service in the Royal Netherlands Navy.
Moray-class: diesel-electric submarines, with an optional air-independent propulsion (AIP) system based on RDM's SPECTRE (Submarine Power for Extended Contact Trailing and Range Enhancement) closed-cycle diesel technology. No Moray-class submarines have been produced to date.

RDM has experience in submarine design and construction, has undertaken maintenance and modernization efforts for the Dutch Navy, and offers logistic support along with training simulators and offset solutions for export customers. In the past 40 years, the company has only constructed a total of eight boats for the RNLN.[2]

The shipyard has undergone a number of ownership changes in the recent past. As its strategic significance diminished with the end of the Cold War under defense budget cuts, the Dutch government sold RDM to Koninklijke Begemann Holding NV, a large industrial conglomerate, in 1991. Already in 1990, a restructuring toward civilian production was being undertaken. Within five years, the 70-30 split in favor of military engineering projects has been reversed.[3,4]

Nonetheless, RDM has continued actively to promote submarine exports to a number of countries, including Taiwan. However, the Dutch government, despite political pressure from its parliament and trade unions, has prevented any such sale to Taipei due to the likely political repercussions on diplomatic relations with China.[5,6,7,8]

In 1996, RDM was acquired by Dutch entrepreneur Joep van den Nieuwenhuyzen, who renewed the yard's determination to export submarines. Shortly before the change of ownership, RDM bought two decommissioned Zwaardvis-class boats from the RNLN.[9] These were to be sold as training vessels to inexperienced navies; RDM's long-term goal remained the future export of its Moray-class.

Under pressure to find buyers for both its used Zwaardvis-class and new Moray-class boats, RDM continued to try to accommodate potential customers. Previously, it had offered to transfer designs allowing for licensed production at US yards under RDM oversight for export to Taiwan.[10] Later, a similar deal was conceived to supply Egypt with submarines as well. The company also offered significant technology transfers to Malaysia, when the country was interested in acquiring a submarine force.[11]

In late 2004, van den Nieuwenhuyzen was pushed out of the defense industry amidst a financial scandal. At the time, van den Nieuwenhuyzen alleged that senior Dutch political figure Jozias van Aartsen (Dutch foreign minister from 1998 to 2002) had promised government compensation to RDM if it backed off the submarine sale to Taiwan. Van Aartsen denied the allegations.[12] Nevertheless, it became known that the Port of Rotterdam's general manager had secretly signed €100 million (about $123.5 million) in loan guarantees for RDM. The city-owned port became responsible for those loans, and by September 2004 there were reports that the Rotterdam Port had acquired RDM.[13] In November 2004 the Port of Rotterdam reported that RDM TDS had gone bankrupt [14].

RDM's future remains uncertain. Despite extensive contacts with numerous European and Southeast Asian navies, it has failed to attract any customers for its boats. Since submarine production plays an important role in retaining the knowledge base necessary to remaining at the forefront of technological development, and given that the Dutch government has so far shied away from the significant development costs needed for new submarine construction, RDM's prospects as a submarine producer are rather bleak.

Unless the company can find significant political support for an integration of RDM either into a European submarine conglomerate under France's DCN or cooperation with Sweden's Viking project, it will likely follow the fate of the Wilton Fijenoord shipyard and close its submarine production line. Much will depend on the future decision by the Dutch government concerning the fate of the RNLN's submarine arm.

Sources:
[1] Alan Dickey, "Special report on the Netherlands: shipbuilding orders down," Lloyd's List International, February 18, 1992; in Lexis-Nexis Academic Universe, http://web.lexis-nexis.com.
[2] RDM Submarines B.V. Website, http://www.euronet.nl/users/rdm_sec.
[3] Paul Berrill, "Submarine yard sold," Lloyd's List International, July 6, 1991; in Lexis-Nexis Academic Universe, http://web.lexis-nexis.com.
[4] Paul Berrill, "RDM profits hit by restructuring," Lloyd's List International, June 8, 1991; in Lexis-Nexis Academic Universe, http://web.lexis-nexis.com.
[5] "Dutch deliberating Taiwanese sub sale," United Press International, February 13, 1992; in Lexis-Nexis Academic Universe, http://web.lexis-nexis.com.
[6] "Holland offers to help ROC build submarines," Central News Agency, January 28, 1993; in Lexis-Nexis Academic Universe, http://web.lexis-nexis.com.
[7] Alan Dickey, "RDM locked in Taiwan sub talks," Lloyd's List International, September 12, 1992; in Lexis-Nexis Academic Universe, http://web.lexis-nexis.com.
[8] "RDM in row over Taiwan subs bar," Lloyd's List International, February 19, 1992; in Lexis-Nexis Academic Universe, http://web.lexis-nexis.com.
[9] "Nieuwenhuyzen neemt RDM over van Begemann," Het Financieele Dagblad, February 10, 1996; in Lexis-Nexis Academic Universe, http://web.lexis-nexis.com.
[10] "Worldwide Naval Projections Report for Netherlands, October 2001," AMI International Website, http://www.amiinter.com.
[11] Mohd Haikal Mohamed Isa, Bernama, January 1, 2001; in "Companies for partnership due to Malaysia's impending purchase of submarines," FBIS Document SEP20010101000042.
[12] "Ex-minister denies promising RDM compensation," Expatica News, September 1, 2004; DutchSubmarines.com Website, http://www.dutchsubmarines.com/export/export_taiwan.htm.
[13] Joris Janssen Lok, "RDM takeover runs into turmoil," Jane's Defence Weekly, September 8, 2004.
[14] "Current situation port affair," November 2, 2004; Port of Rotterdam Website http://www.portofrotterdam.com/new/UK/Port_affair.asp

This material is produced independently for NTI by the James Martin Center for Nonproliferation Studies at the Monterey Institute of International Studies and does not necessarily reflect the opinions of and has not been independently verified by NTI or its directors, officers, employees, agents. Copyright © 2008 by MIIS.