AIP Submarines: The U.S. Taiwan Intrigue UPDATE

What has happened:

From the Taipei Times (Sunday, Nov 26, 2006, Page 1 ) Taiwan must upgrade its submarine warfare capabilities to prevent China, which will have an aircraft carrier battle group by 2020, from surrounding the island. Vice Admiral Tung Hsiang-lung, chief of staff of the Navy Command Headquarters, said that the US government has requested a down payment of US$360 million as a guarantee for the deal, given that Taiwan's opposition has continuously blocked the budget for the purchase of the submarines in the legislature.

Tung said, "If we do not give a down payment, they will not begin to hire European contractors to build the vessels for us." The US government has to hire European contractors to build the eight diesel submarines for Taiwan since the US does not build diesel submarines anymore. (emphasis added)

"But, [the down payment] is not a form of extortion. The down payment is actually a show of our determination and guarantee to the US and potential European contractors that Taiwan will definitely carry out the contract. It also shows our determination to defend ourselves," Tung said.

Earlier Speculation:

On April 21st, in Tracking The Gotland: The Attendant Mysteries Molten Eagle had speculated as follows:

The DOD sees the big advantages to deploying AIP subs in the U.S. fleet. Unit cost is closer to $100 million than over $2 billion for the latest Virginia class submarines. Operating costs are much lower, as well, without nuclear powerplant operators. While U.S. companies will build these subs, Sweden will not sell upgraded stealth technology to foreign countries, because Sweden will provide AIP and perhaps other key hardware to Electric Boat. The U.S. boats will be between 236 and 256 feet in length, around 3,000 tons displacement and still crewed by 30 sailors (with room for 20 or so SEALs or mission hardware).

Contracting out submarine construction is not unheard of at America's premiere sub builder, Electric Boat Co. On July 17, 2006, Molten Eagle discussed a clear precedent (revealed only once) for covertly contracting submarine construction (e.g. Electric Boat to a Canadian shipbuilder Vickers to get round US neutrality laws in 1915 ).

This time, will Taiwan be the go-between? The U.S. would get a fleet of advanced AIP diesel boats forward based and flagged in Taiwan. Strategic. Very, very strategic.