Lebanese, Abu Dhabi-owned yards said building Israel Navy ships

Defense Ministry confident no classified information at risk during construction of corvettes in Germany

Stuart Winer is a breaking news editor at The Times of Israel.

A Sa'ar 5-class corvette of the Israeli navy. (YouTube screen capture)
A Sa'ar 5-class corvette of the Israeli navy. (YouTube screen capture)

Four Israeli navy corvettes are under construction in a shipyard owned by Lebanese and Abu Dhabi-based companies, although officials insist that no classified information about the warships is at risk.

Construction of the ships, needed to defend Israel’s off-shore gas fields, was agreed in a 2015 deal between Israel and German company ThyssenKrupp which has sub-contracted the work out to the shipyard, the Hebrew-language Yedioth Ahronoth daily reported Sunday.

According to Yedioth, Abu Dhabi MAR, a major ship builder in the Persian Gulf, operates the docks where the vessels are being assembled. The company is owned by Lebanese Iskandar Safa, who has a 30% stake via his Privinvest shipbuilding group based in Beruit; the remaining 70% is owned by Al Ain International Group, from Abu Dhabi.

Abu Dhabi, which serves as the capital of the United Arab Emirates does not recognize Israel and does not have official diplomatic or economic ties with the Jewish state. Israel and Lebanon do not have diplomatic ties either and under Israeli law its northern neighbor is considered an enemy state.

The Israel Defense Ministry told Yedioth in a statement that “the contract to buy protective ships was signed with the German company, with direct involvement of the [German] government, that is even funding a third of the cost of the deal.”

“Before the contracts were signed the Director of Security of the Defense Establishment conducted checks with German government officials in order to confirm that no classified material from the project will be transferred to an unauthorized body that has not been approved as such. It is important to note that the German shipyard builds only the body of the ships, all of the systems will be installed in Israel.”

The INS Rahav, Israel's newest submarine, sets off from the German port of Kiel toward Haifa, December 17, 2015. (IDF Spokesperson's Unit)
The INS Rahav, Israel’s newest submarine, sets off from the German port of Kiel toward Haifa, December 17, 2015. (IDF Spokesperson’s Unit)

The circumstances behind the arrangement are the outcome of a failed attempt several years by ThyssenKrupp to cooperate with Abu Dhabi MAR on military shipbuilding contracts. A contract signed between the companies in 2010 was to see civilian shipyards transferred from the Germans to the Abu Dhabi interest, while military projects would be split 50-50 between the two companies. In 2011 ThyssenKrupp announced that the deal was off, yet a small part of the agreement was followed through, including the transfer of the HDW Gaarden shipyard, in Kiel, Germany, to Abu Dhabi MAR. As a result, the dock, which focused on civilian constructions, changed its name to Abu Dhabi MAR Kiel.

However, as the civilian ship business slacked off the yard operators moved into the military market instead. Two months before the Israel-ThyssenKrupp naval deal the yard’s name was changed again to German Naval Yards Kiel with sources saying it was to ease the contract with Israel, Yedioth reported.

In 2015 Israel signed a €430 million ($480 million) deal with ThyssenKrupp to build four Sa’ar 6-class corvettes.

Under the contract, Germany will provide the Israeli-designed corvettes to the Israel Navy, to be delivered over the five years, and will finance approximately one-third of the cost of the deal with a special grant of €115 million ($122 million). The ships are slightly bigger than Israel’s Sa’ar 5 corvettes, the largest ships currently in service with the navy.

In response to inquiries from Yedioth, German Naval Yards Kiel said it is a secondary contractor of ThyssenKrupp Sea Systems and that it contributes to the engineering of sailing vessels and to their construction in the Kiel shipyards. The company noted that all contact between the shipyard and Israeli officials was via ThyssenKrupp.

The revelation came on the heels of reports that an Iranian government company owns 4.5 percent of ThyssenKrupp which is at the center of a scandal over its provision of submarines and other services to the Israel Navy.

Attorney General Avichai Mandelblit last week ordered the police to look into allegations that Prime Minister Benjamin Netanyahu’s personal lawyer, David Shimron, used his close relationship with the premier to push Israel to purchase several submarines from ThyssenKrupp, award the company a contract for the naval vessels to defend Israel’s Mediterranean gas fields, and allow it to build a shipyard in Israel. Shimron was a representative of the company in Israel.

Times of Israel staff contributed to this report.

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