Decision on 8 Trillion Won KDDX Project Method Deferred Again [Yang Nakkyu's Defence Club]

Unable to Reach a Decision in the Subcommittee...
Final Determination May Be Made After the Presidential Election

The decision on the construction method for the next-generation Korean destroyer (KDDX) project, valued at 7.8 trillion won, has been put on hold. This is due to unresolved differences of opinion not only between the two main candidates, HD Hyundai Heavy Industries and Hanwha Ocean, but also within the Defense Acquisition Program Promotion Committee, which has the authority to determine the project’s direction.

On April 24, a government official stated, "In order to ensure the stable progress of the KDDX project, it was decided to defer the agenda item so that the Ministry of National Defense can review the project promotion plan and provide explanations to the National Assembly before resubmitting it to the subcommittee."

The core issue regarding the KDDX project method is which company, HD Hyundai Heavy Industries or Hanwha Ocean, will be responsible for the detailed design and construction of the lead ship. HD Hyundai Heavy Industries maintains that, following established practice, the company that handled the basic design should also conduct the detailed design through a private contract. In contrast, Hanwha Ocean argues that the process should be conducted fairly through a competitive bidding process.

The Defense Acquisition Program Administration is reportedly leaning toward a private contract for the KDDX construction project, but civilian members of the committee are opposed. The committee consists of 25 members in total: 19 from the military and government, and 6 civilian members. The civilian members insist that, since the Ministry of Trade, Industry and Energy designated both companies as "multiple defense contractors" earlier this year, a competitive bidding process is required.

A government official stated, "If the subcommittee fails to reach a decision, the matter will have to be resolved by the next administration," and added, "Since the KDDX project began in 2011 and has already been delayed by 15 years, there may be calls to incorporate newly updated operational capability requirements (ROC) into the design."