Indonesia, UAE Ink New Naval Shipbuilding Deals

PT PAL signs fresh pacts with two UAE firms.

Indonesia, UAE Ink New Naval Shipbuilding Deals
Credit: US Navy Photo

Indonesian naval shipbuilder PT PAL has signed agreements with two United Arab Emirates companies in moves that would increase its Middle East presence and boost the role of Jakarta’s local defense industry.

According to news reports, the deals between PT PAL and Abu Dhabi Shipbuilding (ADSB) and the International Global Group were inked at the 2017 IDEX show which took place in the UAE capital of Abu Dhabi this week.

Regarding the agreement between PT PAL and ADSB, Indonesia’s state news agency ANTARA reported that the two companies “will combine their capabilities and resources to create business opportunities in shipyard, maintenance, repair, and inspection of vessels.” Though not much specifics were unveiled beyond this, vessels that fall under the agreement were said to include fast patrol boats, strategic sealift vessels and light frigates.

With respect to the deal between PT PAL and IGG, Middle Eastern media outlets reported that it would see IGG cooperate with PT PAL Indonesia on an industrial shipyard based in East Java to promote its products within the UAE.

At the most basic level, the two agreements will be a boost for PT PAL’s international presence in general and the Middle East in particular.

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But it is also in line with Indonesia’s broader goal of expanding its local defense industry capabilities as well. As I have written previously, Jokowi has placed an emphasis on producing defense products locally and cementing ties with foreign firms to facilitate the transfer of know-how, new partnerships, and potential exports, and state-owned firms like PT Pindad, PT PAL, and PT Dirgantara are all part of the realization of this objective (See: “An Indonesian Defense Revolution Under Jokowi?”).

Indeed, this is not the first time that an Indonesian state firm has inked a defense-related deal with the UAE. Back in September 2015, PT Pindad signed a new deal offering to transfer technologies to UAE defense logistics and support company Continental Aviation Services (CAS), with the goal of enabling the localized manufacture and marketing of Indonesian products (See: “Indonesia Weapons Firm Inks New Defense Deal With UAE”).