SANTIAGO, Chile — The Argentine government is moving closer to buying new submarines, eying the acquisition of three Scorpene boats from France’s Naval Group that could cost $2 billion, according to military sources in Buenos Aires.
The latest development in the procurement saga is that a Letter of Intention (LoI) was expected to be signed by middle of October, but negotiations over the financial details are taking more time, these sources said, speaking on condition of anonymity to discuss sensitive deliberations.
While France is willing to grant favorable credit conditions, Argentina is having trouble satisfying loan guarantees demanded by banks involved in the deal due to the country’s troubled financial history, according to the sources.
The effort to buy new boats is driven by the fact that the Argentine Navy has virtually no serviceable submarine today. ARA San Juan, one of its two TR-1700 type boats built in Germany in the 1980s, was lost in South Atlantic waters near Cape Horn in November 2017. Meanwhile, refitting and upgrade work on sister ship ARA Santa Cruz, which started in 2016, has been suspended since 2020 and is now virtually cancelled.
ARA Salta, an aging German-built Type 209, remains in service only as a platform for basic training, as she boat cannot dive. For more advance specialist training Argentine crews are being currently sent to spend time with the Peruvian Navy.
Vicente García, an independent security and defense analyst based in Montevideo, Uruguay, says the Argentine sea service needs new submarines “without any doubt.” But the government should be mindful of cost, considering that the other military services also have modernization requirements, he added.
In that context, García said, an initial buy of pre-owned boats would make more sense.
Administrative reductions and cuts in social services pushed by President Javier Milei have yet to prove that they can grow the country’s fiscal liquidity, García added.
“Argentina’s country risk assessment remains high and with between 53% and 57% of the population under the line of poverty, there is a potential for social convulsion and political instability, which can lead to a deterioration of the economy.”
As F-16 fighter jets and P-3C maritime patrol aircraft have been recently acquired second-hand from Denmark and Norway, for the Air Force and Navy, respectively, the modernization of the fleet of TAM medium tanks of the Army has also gained momentum this year.
Besides submarines, the current shopping list also includes frigates for the Navy, wheeled armored vehicles for the Army, helicopters for the three services, and a new standard assault rifle.
José Higuera is a Latin America correspondent for Defense News.