China trying to undercut Germany on submarine offer to Egypt

Discussion in 'West Asia & Africa' started by amoy, Sep 18, 2015.

  1. amoy

    amoy Senior Member Senior Member

    Jan 17, 2010
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    China trying to undercut Germany on submarine offer to Egypt:
    On Wed, 16/09/2015 - 08:20


    China is trying to sell two submarines to Egypt that are cheaper than vessels on offer from Germany, industry sources told Reuters, as Beijing looks to expand weapons exports beyond its traditional customer base in Asia.

    Beijing has sought to undercut Western submarine makers on price and by offering attractive export-credit terms for sales in Asia, the sources said. It has won deals with Pakistan and Bangladesh so far.

    China displaced Germany as the world's third-largest arms exporter, the Stockholm International Peace Research Institute (SIPRI) said in March, though nearly 70 percent of those weapons went to Pakistan, Bangladesh and Myanmar.

    An Egyptian military source said China had offered to sell submarines to Cairo.

    "We are studying it, but it is not an easy decision," said the source, who declined to give details or be identified because he was not authorised to talk to the media.

    An Egyptian military spokesman said he "had no official details" on the issue. China's Defence Ministry did not respond to a request for comment.

    Two industry sources familiar with the matter said Cairo wanted two more submarines after ordering an initial two from ThyssenKrupp Marine Systems (TKMS) of Germany in 2011 that are set to be delivered in 2017. TKMS has been in talks with Egypt for the additional two, they said.

    While TKMS declined to comment, Germany's Economy Ministry said it had authorised the construction of the two additional submarines for Egypt.

    In a sign of developing ties, German company Siemens signed an 8 billion euro ($9.05 billion) deal with Egypt in June to supply gas and wind power plants.

    Beijing had asked Egypt to consider its newer submarines as a lower-cost alternative, the sources said, adding they did not know the type of vessel China had offered or the precise pricing terms.

    "Submarines are definitely on the cards, even though Egypt has been talking to Germany about the additional boats for a while," said one of the industry sources.

    Chinese submarines are built by Wuchang Shipbuilding, which is part of state-run China Shipbuilding Industry Corp . Neither company responded to a request for comment.


    China and Egypt have long had friendly ties, and China supplied Egypt with four Ming-class diesel-electric submarines in the 1980s.

    Egyptian President Abdel Fattah al-Sisi told Chinese President Xi Jinping during a trip to Beijing in December that he wanted more military and security cooperation with China, according to the official Chinese account of the meeting.

    Xi made similar comments to Sisi when the Egyptian leader visited Beijing this month to attend a military parade marking the 70th anniversary of the end of World War Two. Chinese and Egyptian warships also held their first joint naval drills this month.

    Sina News, a popular Chinese news site regulated by the government, said in a commentary last month that China's submarine builders must "make preparations" to meet growing demand from Egypt and other countries in Africa.

    China was Egypt's best option for buying submarines because of Cairo's budget constraints, it said.

    Pakistan approved a deal to buy eight submarines from China earlier this year, while Beijing has also sold two submarines to Bangladesh.

    In July, Thailand put on hold a plan to buy three Chinese submarines, citing the need to evaluate if its navy really needed the vessels.

    China operates a fleet of some 70 submarines, allowing Beijing to project power throughout Asian waters.


    China was proving a tough competitor for Western defence contractors in submarine tenders, the second industry source said.

    "Their prices are much lower ... and the Chinese export credit terms are extremely attractive for military products," said the source, declining to be identified because of the sensitivity of the issue.

    Security experts said they believed China was mainly offering a version of its Song-class submarine for sale on international markets. The vessel is a modern diesel-electric attack submarine that experts say incorporates Chinese adaptations of German and French systems.

    The larger and newer Yuan class boat has a Chinese-designed air-independent propulsion system, according to Chinese news reports, which means it doesn't need to surface as often as other diesel submarines. It also has a smaller acoustic signature, making it harder to detect.

    Several experts, however, questioned how capable the propulsion systems and batteries are, and if they have kept up with Western submarines.

    The Chinese might not have the best submarines on the market, but price was important for developing countries such as Egypt, said Richard Bitzinger, a regional security expert at the S.Rajaratnam School of International Studies in Singapore.

    "It may be a challenge to coordinate operations when you have submarines manufactured by different countries, but that is not a concern for these developing countries as they are more bothered about what is the best deal for them," he said. ($1 = 0.8843 euros)
  3. pmaitra

    pmaitra Moderator Moderator

    Mar 10, 2009
    Likes Received:
    EST, USA
    Good. I strongly wish those bribing Germans to be ousted from this deal, regardless of whether their submarines are better or worse than the Chinese submarines.
  4. amoy

    amoy Senior Member Senior Member

    Jan 17, 2010
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    Egyptian-Chinese MOUs signed for administrative capital projects
    Projects include construction of new governmental buildings and 15,000 residential units
    Sara Aggour January 4, 2016 0 Comments

    An Egyptian-Chinese alliance was formed following the signing of seven memorandums of understanding (MOUs) to implement projects for the New Administrative Capital.

    The MOUs were signed between Chairman of the Arab Contractors company Mohsen Salah, Chairman of Petrojet Mohamed Al-Sheimy, and Vice President of China State Construction Engineering Corporation (CSCEC).

    The alliance will construct the new cabinet’s building along with 12 other ministerial buildings, starting with the Ministry of Housing. The alliance will also build a new convention centre, a fairground, and 15,000 residential units for low and middle income citizens.

    “These projects mark the first phase of the new capital, which will be launched by Egyptian President Abdel Fattah Al-Sisi,” an official statement issued by the ministry read. The first phase will be implemented on 10,500 feddans.

    The MOUs also included the loan agreement for sewage projects in 1,077 villages in eight governments. The loan will be provided by Chinese governmental banks and is for an undisclosed amount.

    During his upcoming visit to Cairo, Chinese President Xi Jinping witnessed the finalisation of the agreement outlined by the MOUs when the Egyptian companies sign the loan agreement with the Chinese side, Minster of Housing Mostafa Madbouly said Sunday.

    At the inception of the new capital project, which was first launched in March 2014 during the Egypt Economic Development Conference (EEDC), the expected cost of construction totaled $45bn and construction was supposed to take place during a five to seven-year implementation period. The capital will be located along the corridor between Cairo and the Red Sea, providing linkages to significant shipping routes.

    Initially, Emirati Company Capital City Partners, a private real estate firm chaired by tycoon Mohamed Al-Abbar who was the principal investor in Dubai’s skyscraper Burj Khalifa which cost $1.5 bn to construct, was said to be the sole developer in the project.

    Madbouly recently announced that the Egyptian New Urban Communities Authority (NUCA) will infuse EGP 5bn in the new capital project.

    The implementation of the new capital project was met with scepticism after conflicting reports from government officials. These reports included statements made by Assistant Minister of Housing Khaled Abbas who pointed out that negotiations with UAE investors over the New Cairo Capital project are facing significant difficulties. This led several news outlets to report that the agreement between Egypt and the UAE partner was terminated.

    In June, Ministry of Housing spokesperson Wafaa Bakry told Daily News Egypt that private negotiations are still ongoing with the presidency. Madbouly also said at the time that those reports were untrue.

    “Signing contracts usually takes a lot of time, so no need to worry about the project,” he had said.

    The latest announcement made by Minister of Investment Ashraf Salman and Madbouly mentioned that Capital City Partners will not be the sole developer but rather will be one among many investors.

    “The government is taking significant steps toward implementing the new administrative capital project via an investment zone system,” Salman said in September.

    Q: How would the Egyptian economy sustain a new capital? :shock:

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