Ottawa: A South Korean consortium has failed to win Canada's multibillion-dollar submarine procurement project, with Ottawa selecting Germany's Thyssenkrupp Marine Systems (TKMS) as the preferred bidder, according to the Canadian leader. Canadian Prime Minister Mark Carney made the announcement before departing for Ankara, Turkey to attend the North Atlantic Treaty Organization (NATO) summit, dashing hopes that the Korean consortium, led by Hanwha Ocean Co. and HD Hyundai Heavy Industries Co., would win the lucrative project.
According to Yonhap News Agency, the announcement came amid speculation that in its selection process, Ottawa could consider the importance of defense cooperation with Germany, a NATO ally, at a time when the transatlantic alliance faces continuing threats from Russia and diplomatic tension with the United States. The project involves the construction of up to 12 diesel-electric submarines under a procurement program valued at up to 60 trillion won (US$39.1 billion), including construction and long-term maintenance.
Prime Minister Carney expressed his contentment with the choice, stating, "I am pleased to announce that Canada has selected TKMS as the preferred supplier for Canada's patrol submarine project." He added that negotiations would now commence for procuring up to 12 submarines, emphasizing the commercial sensitivity of the process. He also assured that if negotiations with TKMS were unsuccessful, Canada retained the right to engage Hanwha Ocean as the preferred supplier.
Carney recognized the efforts of both bidders in the high-profile procurement bid, appreciating their comprehensive and cooperative proposals. He acknowledged South Korea's disappointment but highlighted ongoing cooperation between the two nations. "I can see this is a disappointment. We are moving forward with the relationship (with Korea) because there's so many things we can do together," he stated.
Canada's current fleet includes four Victoria-class submarines acquired second-hand from Britain. Following the announcement, Hanwha Ocean released a statement affirming its commitment to advancing South Korea's maritime defense industry in the global market, despite the setback in the NATO-influenced bid.
Industry observers noted Canada's decision likely considered NATO relationships, with interoperability within the alliance being a priority. However, the shortlisting of Hanwha Ocean was seen as significant progress, indicating the South Korean submarine industry's entry into the global market. "A South Korean defense company, which developed based on German submarine technologies, has now reached a level where it can compete with Germany," an industry official remarked.