April 14, 2006: Indonesia wanted to expand its submarines force, and replace two thirty year old German subs. But their was no money. New subs cost over half a billion dollars each, although Russia was offering better prices on new Kilos. But Indonesia had a bad experience with Russian subs back in the 1960s. The two German type U209 boats they bought in the 1980s had proved sturdy and effective. But they are old boats. So Indonesia made a deal with South Korea, which also operates German subs, to refurbish their two boats. The first one took two years, but in addition to replacing worn parts and checking for any hidden damage, lots of new navigation and weapons systems were installed. The two German boats will thus be good for at least another ten years. By then, the navy hopes to get the money for new subs, or used boats of recent vintage.

South Korea was eager to get the business, as South Korean shipyards are building more warships, including subs. Doing the Indonesian refurbs at a favorable price is expected to make South Korea a leading contender to supply Indonesia with new boats in the future. Meanwhile, Russia is trying to sell diesel-electric boats to Indonesia, and is offering the possibility of financing and low prices. But after using German boats for so long, the Indonesians will need to be convinced that Russian subs can compete.