Navy Captain Chu Hsu-ming told reporters Lung Teh Shipbuilding Co, a private firm, has been awarded a Tw$890 million ($30.1 million) contract for the construction of the first 500-tonne corvette, with delivery slated for 2014.
The prototype will be the first of 12 such twin-hulled boats, which the designer said are hard to detect on radar.
“After the prototype is completed and tested, its specifications may be fine-tuned for the mass production of the (remaining) ships,” said Chu.
Each of the vessels will be armed with up to eight Hsiung Feng (Brave Wind) III anti-ship supersonic missiles as well as eight Hsiung Feng IIs.
Ties between Taiwan and China have eased markedly since Ma Ying-jeou of the China-friendly Kuomintang party came to power in 2008, ramping up trade and allowing in more Chinese tourists.
But Beijing still refuses to renounce the use of force, even though Taiwan has been self-governing since the end of a civil war in 1949, prompting the island to continually modernize its armed forces.
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