Chavez could take loan to buy subs

From Navy Times

Chavez could take loan to buy Russian subs

By Philip Ewing - Staff writer

Posted : Monday Apr 7, 2008 6:24:20 EDT

Russia and Venezuela are in talks over a deal in which a Russian bank would help finance the purchase of four new Russian diesel-electric attack submarines, an official Russian news agency reported Friday.

Citing an article in the Russian business newspaper Kommersant, the RIA Novosti news service reported that Russia’s state Vneshekonombank could loan Venezuela about $800 million to help move forward the proposed $1 billion sale of four new Kilo-class subs. Venezuelan President Hugo Chavez, a socialist strongman and an outspoken foe of the U.S., could sign a contract for the boats as early as May, Novosti reports, when he visits Moscow for the swearing-in of the incoming Russian president Dimitri Medvedev

Russian and Venezuelan officials disclosed no details to Novosti, but the submarine deal has been in the works for years. A financing arrangement could help both countries leap the last hurdle in finally beginning construction on the ships. In 2007, U.S. naval experts said they thought although Venezuela appeared flush with oil money, the government might not be stable long enough to see through the deal, or that oil revenues could trail off before the last ship was finished.

If the loan arrangement goes through as reported, the arrival of Venezuela’s new submarines would represent a brazen challenge to American naval power in its own backyard. The latest-generation Kilo-class boats are some of the quietest and most capable submarines in the world, and although they likely will not be equipped with an Air Independent Propulsion system, as on other modern subs, the small, quiet boats can exploit weaknesses in American anti-submarine tactics developed to fight Soviet nuclear subs in the open ocean.

In March, Adm. Jonathan Greenert, commander of Fleet Forces Command, said he was “not satisfied” with the Navy’s ability to track conventionally powered submarines. Speaking on a panel at the Sea Air Space exposition in Washington, he said that improving anti-submarine warfare was one of his top priorities.

The Navy has “borrowed” some conventionally powered submarines in order to practice hunting them. From 2005 to 2007, West Coast sailors trained with the Swedish submarine Gotland, leased by the U.S. and transported from Sweden aboard a heavy-lift ship; the Chilean submarine Simpson took its place last September.