Treating the Scorpene’s sting

By Ajai Shukla

Business Standard, 30th Aug 16

After an Australian newspaper began publishing reams of operational and technical data last week relating to six Scorpene submarines that will begin joining the Indian Navy next year, there is grave concern in some quarters. The Scorpene’s vendor, France’s Direction des Constructions Navales Services (DCNS), told an Australian court that: “this highly valuable document causes a direct harm to DCNS and its customer”. An American admiral who was its former top submarine commander in the Pacific puts it simply: “It is never good for an opponent to have your playbook.” Yet, the Indian Navy has publicly pooh-poohed the danger and insisted optimistically that the leaked information could provide no advantage to an enemy. Only after five days of denial did the naval chief admit on Monday that the leak is of serious concern. Behind the navy’s blitheness is the logic that compromised submarines are better than no submarines at all. Having taken 17 years to nurse Project 75 (the Scorpene project) this far, the admirals worry that the leaks could endanger it now. Anyhow, submarines sunk in some future war will be someone else’s problem.

The navy must abandon this inward-looking stance since this is an international issue. The first question to ponder is: what is driving the Scorpene leaks? There are seven possible answers, some more probable than others. First, this could be an attempt to change Australia’s decision, announced in April, to award DCNS a US $38 billion contract to build 12 conventional submarines under its SEA 1000 project. The losing vendors were Japanese (Mitsubishi/Kawasaki combine) and German (ThyssenKrupp Marine Systems, or TKMS). Second, this could be Canberra’s ploy to release secrets harmless to Australia (though not to India) to pressure DCNS into lowering its price. Third, it could a foreign government stratagem (e.g. China) to scuttle Australia’s SEA 1000 project by portraying DCNS as unreliable. Fourth, it could be a dissatisfied former customer of DCNS --- e.g. Pakistan, Chile, Brazil and Malaysia, if India could be removed from the list of potential suspects. Fifth, it could be a disgruntled DCNS employee, or agent who was removed as a result of Europe’s recent emphasis on anti-corruption compliance. If this sounds far-fetched, recall that the killing of 11 DCNS engineers in Karachi by a suicide bomber in 2002 was blamed (by a DCNS-commissioned investigation) on a vengeful agent in Pakistan who was incensed that his commissions were discontinued. Since then, many more agents have been de-hired by European defence companies, presumably including DCNS. Sixth, Washington could have driven the leak to prevent sensitive American technologies (such as the combat management system, or torpedoes) from being integrated into a French submarine. Seventh, and last, a rival submarine manufacturer like TKMS could be discrediting DCNS to boost its own prospects in India’s impending Project 75I --- a multi-billion dollar project to build six conventional submarines with air-independent propulsion (AIP), which New Delhi is currently mulling.

Should New Delhi blacklist DCNS for laxity in preserving secrecy? Does the navy have a better alternative, or would it be forced to buy more Russian submarines, increasing its reliance on Moscow, which has already provided ten of India’s fourteen attack submarines? Of the alternatives, America only builds nuclear powered boats (as submarines are referred to), buying Chinese is inconceivable, British submarines are out-dated and Japanese boats too large and expensive. That leaves only European vendors, predominantly three --- DCNS, TKMS and Kockums of Sweden.

Meanwhile, very few countries are buying submarines. The US, Russia, China, UK and Japan all build their own boats. South Korea and Turkey have also developed indigenous submarine industries. Brazil and Australia have fixed on DCNS, and are holding course for now. That leaves Norway, which is looking to buy six submarines; with Poland and Holland piggybacking on its order with possibly three each of their own. Besides those 12 boats, there is only India’s Project 75I for another six.

With the market depressed, Europe’s submarine builders face consolidation. Some years ago, TKMS (which owns Howaldtswerke-Deutsche Werft, or HDW, which built India’s four Type-209 submarines) bought Swedish shipyard, Kockums --- the industry consensus was that TKMS wanted to strangle Kockums to eliminate the rival Swedish submarine industry. A furious Stockholm physically repossessed Kockums in April 2014, and eventually prevailed upon Swedish defence major, Saab, to buy back Kockums. That has left TKMS weakened amidst intensifying competition. If it were to lose the Norwegian tender, having already lost the Australian one, it would probably have to merge with DCNS to survive. With the French defence budget ($51 billion) significantly larger then Germany’s ($39 billion), Paris will inevitably, as the continent’s biggest defence buyer, call the shots on Europe’s defence industry. Inevitably, DCNS will also swallow Saab Kockums, given that Sweden has ordered just two A-26 submarines and there are no more orders in sight.

This means that, were India to penalise DCNS by shifting its custom to TKMS or Saab Kockums, the broad trends of submarine industry consolidation would probably bring the order back to the DCNS stable. Even so, there remain key differences between these companies. DCNS, given France’s Atlantic seaboard, colonial tradition overseas, and Great Power pretensions, has a “blue water” tradition of building larger submarines, including nuclear-powered boats. Australia selected DCNS for its SEA 1000 project primarily because it offered a large submarine --- a slightly shortened version of the nuclear-powered Barracuda, christened the Shortfin Barracuda. With India signalling a new emphasis on nuclear-powered submarines (aiming at 18 conventional, plus six nuclear powered boats), DCNS would be keen to partner India in its nuclear submarine programme, just as Russia does. The US Navy is, by some margin, the global leader in nuclear submarine technology, but will not part with it for anything.

However, TKMS continues to have relevance for India. Germany, given its limited coastline along the shallow Baltic and North Seas, has nurtured a tradition (dating back to its U-boats in World War I and II) of building smaller submarines with high quality sonars. The Indian Navy, given the variance in its coastal geography, needs small as well as large submarines. The former would be essential in the shallow Arabian Sea, where the waters 25 kilometres from Karachi are just 40 metres deep. In contrast, larger submarines (including nuclear powered boats) can operate freely in the Bay of Bengal, where the waters 5 kilometres out from Visakhapatnam are over 3,000 metres deep.

All this suggests that the Scorpene leaks, damaging though they are for operational security, must be treated from a strategic as well as a tactical and techno-commercial standpoint. India’s strategic interests in the Indian Ocean demand a close partnership with Paris, to complement and balance the US-India relationship. French submarine building remains important for a navy that is looking beyond blockading Karachi, at blue water operations across the deep ocean. The challenge before the admirals is to move beyond reflexive denial and develop a nuanced plan of action that will cater to all these variables.