Selected Alongside German Company
If Successful, Would Mark the Largest Single Defense Export Deal
Participating as a "One Team" in Canadian Submarine Project Mediated by DAPA
Hanwha Ocean and HD Hyundai Heavy Industries, which formed a "one team" to bid for Canada's submarine procurement project worth up to 60 trillion won, have been selected as preferred negotiation partners together with a German company. The Canadian government plans to select the final contractor as early as next year after conducting additional evaluations of the candidates.
According to the industry on August 26, the Hanwha Ocean and HD Hyundai Heavy Industries consortium, acting as a "one team," has been selected as a preferred negotiation partner for the Canada Patrol Submarine Project (CPSP) alongside Germany’s Thyssenkrupp Marine Systems (TKMS).
This project aims to acquire up to 12 diesel submarines to replace the four Victoria-class submarines, which are scheduled to be decommissioned in the mid-2030s. The contract for acquiring the submarines alone is worth up to 20 trillion won, and including operation and maintenance costs over the next 30 years, the total contract value could reach as much as 60 trillion won. If successful, this would be the largest single defense export contract in history.
Under the mediation of the Defense Acquisition Program Administration, South Korean defense companies entered this bid as a "one team," with Hanwha Ocean taking the lead and HD Hyundai Heavy Industries providing support. Last year, in the Australian project to acquire 11 new frigates, the two companies competed separately but both lost out to Japanese and German firms. However, by joining forces for this project, they have advanced to the final candidate stage.
In February, the two companies signed a memorandum of understanding (MOU) under the initiative of the Defense Acquisition Program Administration to cooperate as a "one team" for future naval vessel export projects. The agreement stipulates that, when participating in naval vessel export projects, the government and the shipbuilding industry will form a "one team," with HD Hyundai Heavy Industries leading surface vessel exports and Hanwha Ocean leading submarine exports, each supporting the other in their respective areas of strength. For this Canadian submarine bid, Hanwha Ocean took the lead while HD Hyundai Heavy Industries provided support, forming a single unified team.
The final contract for the Canadian submarine project is expected to be signed around 2028, but there is a possibility that an early contract could be concluded as soon as next year.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
