Ottawa: A South Korean consortium has failed to secure Canada's multibillion-dollar submarine procurement project, as Ottawa has chosen Germany's Thyssenkrupp Marine Systems (TKMS) as the preferred bidder. Canadian Prime Minister Mark Carney announced the decision before departing for the NATO summit in Ankara, Turkey, thereby ending hopes for the Korean consortium led by Hanwha Ocean Co. and HD Hyundai Heavy Industries Co.
According to Yonhap News Agency, the announcement came amid speculation that Canada's decision was influenced by the importance of defense cooperation with Germany, a NATO ally. This selection process took place against a backdrop of ongoing threats from Russia and diplomatic tensions with the United States. The procurement project is set to involve the construction of up to 12 diesel-electric submarines, with a valuation reaching up to 60 trillion won (US$39.1 billion), including construction and long-term maintenance.
Prime Minister Carney expressed his satisfaction with the decision, stating, "I am pleased to announce that Canada has selected TKMS as the preferred supplier for Canada's patrol submarine project." He emphasized the confidentiality of the forthcoming negotiations, "We will now enter into negotiations to procure up to 12 submarines, and that process is commercially sensitive, and as always, we will not negotiate in public so as to maintain the strongest possible position for Canada."
Carney also highlighted a contingency plan, noting that if negotiations with TKMS fall through, Canada reserves the right to name Hanwha Ocean as the preferred supplier. He acknowledged the efforts of both bidders, describing the South Korean consortium as the "reserve supplier."
Expressing gratitude to the competitors, Carney said, "I would like to thank both bidders for the extraordinarily thoughtful, comprehensive and cooperative proposals that they and their government submitted." He reiterated the strategic importance of Germany, Norway, and South Korea as partners to Canada.
Carney revealed that he recently discussed various topics with South Korean President Lee Jae Myung, including the submarine project. He acknowledged South Korea's disappointment, given the strength of their bid, and assured that Canada values its relationship with South Korea. "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 added.
Currently, Canada operates Victoria-class submarines, which were acquired second-hand from Britain.