Article Posted on : - Jul 01, 2015

The Gotland-class conventional submarine. A SAAB photo

STOCKHOLM (BNS): Swedish defence major SAAB has signed a contract with the Swedish Defence Materiel Administration (FMV) for the construction of two new Type A26 submarines for the Swedish Navy.

In another contract, the company will carry out mid-life upgrade for the two Gotland-class submarines in service with the Swedish Navy.

The orders, signed with FMV on Tuesday (June 30), cover the period 2015-2024 and the total order value is SEK 8.6 billion (US$ 1.04 billion).

SAAB will construct, verify and deliver the two new Type A26 submarines for the Swedish Navy to a total order value of SEK 7.6 billion. Deliveries will start in 2022 and be finalised in 2024, the company said.

It will also conduct a mid-life upgrade on two of Sweden's existing Gotland-class submarines, including an overhaul and upgrade of the combat system. The total value of this work is SEK 2.1 billion.

The two upgraded vessels will be delivered to FMV in late 2018 and late 2019, respectively.

The company has already received orders in 2014 and 2015 for the procurement of subsystems related to these contracts. These existing orders have a total value of SEK1.1 billion. Hence, the total order value related to Tuesday's orders amounts to SEK 8.6 billion.

The Type A26 submarine will be powered by conventional diesel-electric propulsion machinery and equipped with the Kockums Stirling AIP (air-independent propulsion) system. The Stirling system will make the Type A26 very stealthy and difficult to detect.

The Swedish Government, in March this year, had announced plans to raise defence spending between 2016 and 2020 and bring back troops to a "strategic" Baltic island amidst concerns over Russia's military resurgence in the region. The increased defence spending would go towards modernising ships that could detect and intercept submarines.