071 LPD thread

lcloo

Captain
To understand why PLAN ships are much cheaper than US and western counter parts, two main factors are (1) the production cost (material, wages) in China is much lower, and (2) the profit on military ships are fixed at cost plus 5%.

Western shipyards and equipment manufacturers sell their wares at huge profits, I do not have real figure, but I guess anything less than 100% (on original contract cost) is unlikely. Thus if the cost of a ship in US is $100 million, US Navy likely to procure it at above $200 million. While in China PLAN would have paid only $$105 million.

Below is an article by pop3. In short summary, it emphasis on the Cost + 5% earning for shipyard building ships for PLAN. 5% profit is on the final cost, which includes unforeseen costs, and is guarantee under legal laws (so that shipyards will never make loss).

我军战舰的价格都是如何拟定的?利润是百分之多少?
武器装备的采购价格历来是人们所关心的一个热门问题,很多人的认知是从媒体上所得到国外如美国等国的军火暴利等印象,在中国是不会允许出现此类暴利情况,中国的军事装备承制单位主要是国有企事业单位,国家对军品的价格管理有明文的规定。近些年来,进入军品研究制造领域的非国有制企业逐渐增多,但这些企业与国有制企业一样,遵照执行相同的军品价格管理体系。中国目前所执行的军品价格规范最权威的顶层文件是1996年由国家计划委员会、财政部、总参谋部、国防科工委等部门联合发布(1996)计价管108号文《军品价格管理办法》,这个文件规范了军品在生产过程中各方面价格管理办法及最终利润。

1000


《军品价格管理办法》对军品的最终利润规定为5%,这是以经过审核的军品成本基数所计算的纯利润,在中国,军品是免税产品。《军品价格管理办法》颁布较早,近些年来对军品5%的纯利润是否太低一直有一些不同的看法,这是可以理解的,但是在国家未颁布新的军品价格管理办法之前,必须按108号文件执行。常有人把军品价格与军品研制价格混淆,这两者并非同一概念而有本质上的区别。军品科研价格是国防科研研制费,按国防科工委和财政部1995年颁发的《国防科研项目计价管理办法》及总装备部、财政部2006年颁布的《国防科研试制费管理规定》执行。在实际执行中,军品科研研制的费用与军品生产采购的费用也是分开对待分别列支。

1000


1987年1月22日,国务院和中央军委颁布了《武器装备研制研制合同暂行管理规定》《国防科研试制费拨款管理暂行办法》,军品订货改由从拨给制为合同制,即经费由原来直接拨给军品研制生产部门改为拨给军队,再由军队向研制生产单位通过签订合同的方式采购军品。军品订货也同样要执行《中华人民共和国合同法》的规定。因为军品所具有的特殊性,军品合同在一些具体条款上与民品有所不同。

军品的订货合同均为制式文本,有统一的格式和要求,针对不同的标的物有不同的合同文本。以海军舰船及配套产品来说,型号的预先研究所签订的是《海军武器装备预先研制合同》,武器装备设计所签订的是《海军武器装备研制合同》,武器装备订货则需要签订《海军武器装备订货合同》。针对武器装备科研、制造和维修等不同的情况,还有《海军武器装备研制立项综合论证研究合同》、《海军武器装备配套产品订货合同》、《海军引进装备备件研制合同》、《海军武器装备修理合同》等等,合同化已经深入到海军武器装备从预研、研制、生产、配套和修理等各个方面,并进行有效的管理。

1000


这里以055型驱逐舰为例来具体说明。055型舰在综合论证时由海军装备研究院承担论证任务,其与海军签订《055型导弹驱逐舰研制立项综合论证研究合同》,并按海军的要求在规定期间内完成并提出《055型导弹驱逐舰综合论证立项报告》。在研制阶段,中国船舶重工集团舰船701研究所与军方签订《055型导弹驱逐舰研制合同》并按要求完成各设计节点的内容,并最终提供技术设计和施工设计等所有与设计相关的图纸资料。在生产阶段,海军作为甲方与船厂签订《055型导弹驱逐舰订货合同》,而船厂再作为甲方与配套设备厂家签订《055型驱逐舰配套产品订货合同》。这里有个例外,即海军舰艇进行现代化改装时,改装的总体设计费也是并入船厂的改装合同中,列入军品专项费一栏。

海军舰船订货合同的内容相当复杂和庞杂,从实物形态上来说有硬件成本与非硬件成本,从船厂角度来说有本厂成本与外购成本,通常包括原材料费、配套设备费、人工工时费、军品专项费、不可预见费和利润等几个方面,配套设备提供给船厂的价格中已包含5%的利润现行《军品价格管理办法》对军品的利润规定为5%,这是法律性的文件,不可突破在军品报价、审核和谈判时,乙方总会多报成本,军方则是在审核的基础上核销多报的部分。但买的没有卖的精,乙方不会亏损,对乙方来说,还有一项即不可预见费也可以转化为纯利润,不可预见费相当于风险奖励费,如果乙方安排的科学合理,较好控制了技术风险和进度风险,那么不可预见费则就是纯利润,军品科研的不可预见费与利润的比例相同,也是5%。在军品价格管理中,一些有益的做法也在实施,如以前重硬件轻软件,软件作为硬件的附属品不单独计价,而现在随着对软件的重视程度增加,软件也开始单独计价。舰船订货合同里所规定的总价并非一次性给付,而是根据随着各大节点如开工、上船台、试航、交付、保修等完成后支付,军方付款是以国家采购为信用的,故此有绝对的保障。

作者:pop3
 
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D

Deleted member 13312

Guest
To understand why PLAN ships are much cheaper than US and western counter parts, two main factors are (1) the production cost (material, wages) in China is much lower, and (2) the profit on military ships are fixed at cost plus 5%.

Western shipyards and equipment manufacturers sell their wares at huge profits, I do not have real figure, but I guess anything less than 100% is unlikely. Thus if the cost of a ship in US is $100 million, US Navy likely to procure it at above $200 million. While in China PLAN would have paid only $$105 million.

Below is an article by pop3. In short summary, it emphasis on the Cost + 5% earning for shipyard building ships for PLAN.

我军战舰的价格都是如何拟定的?利润是百分之多少?
武器装备的采购价格历来是人们所关心的一个热门问题,很多人的认知是从媒体上所得到国外如美国等国的军火暴利等印象,在中国是不会允许出现此类暴利情况,中国的军事装备承制单位主要是国有企事业单位,国家对军品的价格管理有明文的规定。近些年来,进入军品研究制造领域的非国有制企业逐渐增多,但这些企业与国有制企业一样,遵照执行相同的军品价格管理体系。中国目前所执行的军品价格规范最权威的顶层文件是1996年由国家计划委员会、财政部、总参谋部、国防科工委等部门联合发布(1996)计价管108号文《军品价格管理办法》,这个文件规范了军品在生产过程中各方面价格管理办法及最终利润。

1000


《军品价格管理办法》对军品的最终利润规定为5%,这是以经过审核的军品成本基数所计算的纯利润,在中国,军品是免税产品。《军品价格管理办法》颁布较早,近些年来对军品5%的纯利润是否太低一直有一些不同的看法,这是可以理解的,但是在国家未颁布新的军品价格管理办法之前,必须按108号文件执行。常有人把军品价格与军品研制价格混淆,这两者并非同一概念而有本质上的区别。军品科研价格是国防科研研制费,按国防科工委和财政部1995年颁发的《国防科研项目计价管理办法》及总装备部、财政部2006年颁布的《国防科研试制费管理规定》执行。在实际执行中,军品科研研制的费用与军品生产采购的费用也是分开对待分别列支。

1000


1987年1月22日,国务院和中央军委颁布了《武器装备研制研制合同暂行管理规定》《国防科研试制费拨款管理暂行办法》,军品订货改由从拨给制为合同制,即经费由原来直接拨给军品研制生产部门改为拨给军队,再由军队向研制生产单位通过签订合同的方式采购军品。军品订货也同样要执行《中华人民共和国合同法》的规定。因为军品所具有的特殊性,军品合同在一些具体条款上与民品有所不同。

军品的订货合同均为制式文本,有统一的格式和要求,针对不同的标的物有不同的合同文本。以海军舰船及配套产品来说,型号的预先研究所签订的是《海军武器装备预先研制合同》,武器装备设计所签订的是《海军武器装备研制合同》,武器装备订货则需要签订《海军武器装备订货合同》。针对武器装备科研、制造和维修等不同的情况,还有《海军武器装备研制立项综合论证研究合同》、《海军武器装备配套产品订货合同》、《海军引进装备备件研制合同》、《海军武器装备修理合同》等等,合同化已经深入到海军武器装备从预研、研制、生产、配套和修理等各个方面,并进行有效的管理。

1000


这里以055型驱逐舰为例来具体说明。055型舰在综合论证时由海军装备研究院承担论证任务,其与海军签订《055型导弹驱逐舰研制立项综合论证研究合同》,并按海军的要求在规定期间内完成并提出《055型导弹驱逐舰综合论证立项报告》。在研制阶段,中国船舶重工集团舰船701研究所与军方签订《055型导弹驱逐舰研制合同》并按要求完成各设计节点的内容,并最终提供技术设计和施工设计等所有与设计相关的图纸资料。在生产阶段,海军作为甲方与船厂签订《055型导弹驱逐舰订货合同》,而船厂再作为甲方与配套设备厂家签订《055型驱逐舰配套产品订货合同》。这里有个例外,即海军舰艇进行现代化改装时,改装的总体设计费也是并入船厂的改装合同中,列入军品专项费一栏。

海军舰船订货合同的内容相当复杂和庞杂,从实物形态上来说有硬件成本与非硬件成本,从船厂角度来说有本厂成本与外购成本,通常包括原材料费、配套设备费、人工工时费、军品专项费、不可预见费和利润等几个方面,配套设备提供给船厂的价格中已包含5%的利润现行《军品价格管理办法》对军品的利润规定为5%,这是法律性的文件,不可突破。在军品报价、审核和谈判时,乙方总会多报成本,军方则是在审核的基础上核销多报的部分。但买的没有卖的精,乙方不会亏损,对乙方来说,还有一项即不可预见费也可以转化为纯利润,不可预见费相当于风险奖励费,如果乙方安排的科学合理,较好控制了技术风险和进度风险,那么不可预见费则就是纯利润,军品科研的不可预见费与利润的比例相同,也是5%。在军品价格管理中,一些有益的做法也在实施,如以前重硬件轻软件,软件作为硬件的附属品不单独计价,而现在随着对软件的重视程度增加,软件也开始单独计价。舰船订货合同里所规定的总价并非一次性给付,而是根据随着各大节点如开工、上船台、试航、交付、保修等完成后支付,军方付款是以国家采购为信用的,故此有绝对的保障。

作者:pop3
The major shipyards in China are all state owned, which means they get to write of any costs and overheads against state defense budget while US shipyards are still private owned despite having government patronage. But that still means that Chinese ships has costs that we don't see on paper.
If Norfolk shipyard and Puget Sound workers can be assured of a steady paycheck regardless, then they can afford to shunt the prices down to Chinese levels.
 
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weig2000

Captain
I read the article from pop3 on the cost of 071 a while back. Basically he said 071 costs about 1 billion yuan, after some costing-cutting measures, including downgrading the original plan of installing 1130 to 630K. 054A costs about 1.5 billion yuan. The first 071 commissioned more than a decade, so it's likely costing more, but should still be less than 054A.

I could not find the original pop3 article, but here is a re-posting of the article on
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.
 
D

Deleted member 13312

Guest
Korea built the Dokdo LPH for $300M, albeit it is about 2x smaller than a Type-071.
The Koreans are also building the Makassar LPDs for Indonesia for just $45M. Note the Makassar is about 3x smaller than a Type-071.

So it could be $300M for a Type-071.
And if the Malaysians were offered the Type-071 at one-third of the average San Antionio $1600M cost, that works out as $500M for that Type-071 export order.

So do you actually mean to say is that it is the San Antonio LPD which ridiculously expensive - when compared to Chinese or Korean LPDs?
There is a reason why the Makassar cost that low, seeing as it barely has any means of self defence or radar suit.
The increased price tag on the San Antonio can be atrributed to the addtional radar and weapons system it carries as those RAM launchers won't come in cheap. Plus the builder being a private company has to make a profit to cover both expense and future overheads as compared to Huapung who gets to write it's costs off with the Chinese state defense budget. The same thread is also seen with Hanjin and other Korean shipyards, with the government pumping billions into them to keep them afloat and to keep the prices down, but even that generous support did not stop Hanjin for filling for default on their bank loans recent, an act which the low cost of their products certainly did not help to elevate.
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One side puts the entire cost up front while the other punts its off into state expenses, but in the end the money still has to be paid.
 
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D

Deleted member 13312

Guest
To put it in to prespective, Hyundai Marine Merchant got an immediate 5 billion in state funding from the SK government after Hanjin when belly up, while Daewoo got 10 billion alone for shipbuilding, double the sum. While the US shipyards do not have such practices.

We can only really speculate the total sum that is poured into Chinese shipyard in return due to their opacity, but we can be sure that it is there due to the simple fact that subsidizing is really the only way in the global shipbuilding industry. Some analysis states that government subsidizing allows for ships to be build 15-20 per cent cheaper. And that is not accounting for the fact that state owned corporations need not account for future dry spells or losses.
So as much as people will like to crap on the state of US shipbuilding, they at least don't carry a truck load of baggage underneath the rug.
 
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AndrewS

Brigadier
Registered Member
There is a reason why the Makassar cost that low, seeing as it barely has any means of self defence or radar suit.
The increased price tag on the San Antonio can be atrributed to the addtional radar and weapons system it carries as those RAM launchers won't come in cheap. Plus the builder being a private company has to make a profit to cover both expense and future overheads as compared to Huapung who gets to write it's costs off with the Chinese state defense budget. The same thread is also seen with Hanjin and other Korean shipyards, with the government pumping billions into them to keep them afloat and to keep the prices down, but even that generous support did not stop Hanjin for filling for default on their bank loans recent, an act which the low cost of their products certainly did not help to elevate.
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One side puts the entire cost up front while the other punts its off into state expenses, but in the end the money still has to be paid.

Yes, Makassar is really cheap because it is a lot smaller, and is strpped down and possibly due to South Korean subsidies.

But when you account for this, the San Antonio is still way more expensive. That also applies in comparison to the Dokdo and Type-071.

A medium range air defence suite should be in the range of $50M-$100M which is nowhere near the difference in costs.

Plus it begs the question, why do you need a medium range air defense suite in the first place? You want such a system on an escort frigate, not on the LPD

Remember that the San Antonio was supposed to cost $890M, which would be a reasonable cost compared to the Dokdo or Type-071 given the specs.

But somehow the San Antonio cost ballooned to $1600M.

As for Chinese subsidies, given that Chinese naval shipyards are running with what looks like no spare capacity, it would be very strange if military exports weren't covering their costs.
 

lcloo

Captain
The major shipyards in China are all state owned, which means they get to write of any costs and overheads against state defense budget while US shipyards are still private owned despite having government patronage. But that still means that Chinese ships has costs that we don't see on paper.
If Norfolk shipyard and Puget Sound workers can be assured of a steady paycheck regardless, then they can afford to shunt the prices down to Chinese levels.

Since you are likely cannot read Chinese, let me explain what is written in that lengthy article I attached. The essential point is Shipyard got to charge PLA Navy at Final Cost plus 5%. Final Cost here has been explicitly stated under the legal document as inclusive of unforeseen expenses and R & D cost 军品科研的不可预见费与利润的比例相同,也是5%.

In commercial practice, we called Final Cost as contract costs plus VO cost. Japanese contractors has same practice in their turnkey project in which they will charge Final Cost (original contract cost + VO costs) plus X% profit.

There is no need for the Chinese government to absorb overhead as write off against state budget because PLAN is going to foot all the expenses plus 5% as this is already written in the law, you cannot use Western practice of contract and sales on the Chinese. The legislated law on Navy procurement stated that 5% profit must be given on top of All expenses including unforeseen expenses.

And there is no need to hide cost on paper because they do not publish them for public viewing, what is the point of hiding, and hiding from whom? Who would they want to impress upon?

Major shipyards make their profits mainly from civilian ships and export of navy ships. PLA navy ships are the least profitable but in launching large numbers in short time, the return is still significant. Most important, the major shareholder doesn't mind.
 
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Max Demian

Junior Member
Registered Member
Another factor that shouldn't be overlooked is the survivability rating of a ship.

The USN has three military levels. San Antonio class is classified as Level 2. Burkes for example are level 3. Some navy ships are built only up to commercial standards.

It's not just Chinese ships that are cheaper. Euro ships also tend to be cheaper than comparable USN ships. However, they have not fared as well when struck by weapons or freighters/tankers.
 

AndrewS

Brigadier
Registered Member
To put it in to prespective, Hyundai Marine Merchant got an immediate 5 billion in state funding from the SK government after Hanjin when belly up, while Daewoo got 10 billion alone for shipbuilding, double the sum. While the US shipyards do not have such practices.

We can only really speculate the total sum that is poured into Chinese shipyard in return due to their opacity, but we can be sure that it is there due to the simple fact that subsidizing is really the only way in the global shipbuilding industry. Some analysis states that government subsidizing allows for ships to be build 15-20 per cent cheaper. And that is not accounting for the fact that state owned corporations need not account for future dry spells or losses.
So as much as people will like to crap on the state of US shipbuilding, they at least don't carry a truck load of baggage underneath the rug.

Let's say unsubsidised chinese costs would be 15-20% higher. This doesn't change the argument that a San Antonio is ridiculously overpriced at $1600M-$2000M versus $300M-$600M for a Type-71

Plus Chinese naval shipyards are unlikely to ever experience dry spells in the next 20 years.

Remember that we're looking at a Chinese economy growing to roughly twice the size of the US in 15 years. If anything, China needs more naval shipyards to support a fleet that is conmparable to the US Navy.
 
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asif iqbal

Lieutenant General
US warships are built to the highest standards no cuts, the grade of the work is second to none top end stuff as is Japan

US warships can easily do 40 years, UK warships do half that

Question is how robust is the Chinese warships, the old units are not that good

but these new Type 052DL and Type 055 certainly look like top tier warships
 
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