Dutch submarine buy from France to spark $1.1 billion in offsets

PARIS — The Netherlands secured spending of about €1 billion ($1.1 billion) on Dutch companies as part of its multibillion-euro purchase of four attack submarines from France’s Naval Group, the Dutch Ministry of Defence said.

Dutch State Secretary of Defence Gijs Tuinman and Naval Group CEO Pierre Eric Pommellet signed the contract for four submarines at the Royal Netherlands Navy home port of Den Helder on Monday, the ministry said in a statement.

That follows a memorandum of understanding between the Dutch and French governments on knowledge sharing and user rights, and an industrial cooperation deal that foresees around €1 billion in spending with Dutch companies as well as continued involvement of Dutch research institutes. Naval Group is 62% held by the French government, with French defense firm Thales owning 35% of the shipbuilder.

The Netherlands in March disclosed a budget of €5.65 billion to replace its aging Walrus-class submarines, including a delta to operate the future vessels over their 30-year lifespan as well as a project-risk reserve. Naval Group is set to deliver the first two of the four submarines by 2034, with the new vessel a conventionally-powered variant of its Barracuda class.

“We are going for state-of-the-art submarines that serve the Dutch security interests and those of NATO and Europe to the maximum,” Tuinman said in a post on X, formerly Twitter. He said the new submarines will allow the Netherlands “to show our teeth and if necessary, bite hard.”

Dutch involvement in the new submarines will include hydraulic systems, air-conditioning systems, acoustic cladding, detection devices, sonar, composite structures and water-making equipment, according to Tuinman. The Dutch Ministry of Economic Affairs didn’t immediately respond to phone calls and text messages regarding the details of the offset agreement.

The submarines are a strategic capacity and will be equipped for intelligence gathering, as well as cruise missiles, the state secretary said. Tuinman said the Netherlands is investing in its underwater capacity because “credible deterrence” is the best defense, and war is prevented by preparing for the possibility of conflict.

The Netherlands plans to equip the new subs with Tomahawk cruise missiles for a land-strike capacity, something the current Walrus class lacks, in addition to torpedoes.

The deal is a “major step” for the naval cooperation between France and the Netherlands, French Ambassador to the Netherlands François Alabrune said in a post on X.

The Netherlands had requested proposals in November 2022 from Naval Group, Germany’s ThyssenKrupp Marine Systems and Sweden’s Saab Kockums in cooperation with Dutch shipbuilder Damen.

France operates a nuclear-powered version of the Barracuda class, and in 2020 the country estimated the cost of the program to build and operate six submarines in the class at €10.4 billion, up from €8.6 billion in 2010.