Canada's 60 Trillion Won Submarine Project May Be Split Between South Korea and Germany

There is speculation that Canada’s submarine procurement project, worth up to 60 trillion won, could be divided between South Korea and Germany.

Stephen Fuhr, Secretary of State for Defence Procurement of Canada (fifth from the left), visited Hanwha Ocean Geoje Plant on the 2nd of last month and took a commemorative photo with the officials. Photo by Hanwha Ocean

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On March 3, the Canadian daily newspaper The Globe and Mail reported, citing government sources, that the Canadian government is considering splitting the submarine order between South Korea and Germany. According to the report, Canada is reviewing a scenario in which it would place orders for six submarines each from South Korea and Germany, for a total of 12 submarines.

Specifically, there is discussion about deploying six "Type 212CD" submarines, built by Germany's Thyssenkrupp Marine Systems (TKMS), to the Atlantic coast, while six "KSS-III Batch-II" submarines from Hanwha Ocean would be deployed to the Pacific coast or the Indo-Pacific region.

The Globe and Mail stated, "According to government sources, the decision on whether to split the contract will be based on the country's economic and military needs," and added, "If the contract is split, Canada could benefit from economic advantages such as industrial investment from both South Korea and Germany."

The Canadian Patrol Submarine Project (CPSP) aims to procure up to 12 diesel-powered submarines to replace the four Victoria-class submarines scheduled for retirement in the mid-2030s. The total project value is estimated to be as high as 60 trillion won.

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Currently, a consortium of South Korea’s Hanwha Ocean and HD Hyundai Heavy Industries is in final competition with Germany’s TKMS, and the winning bidder could be selected as early as June this year.

It has been reported that Canada has made industrial investment a key condition to strengthen its domestic manufacturing base. South Korea has been offered the possibility of Hyundai Motor Company establishing a local factory, while Germany has been proposed to consider additional production facility investments by Volkswagen.

David McGuinty, Canada’s Minister of National Defence, emphasized the fairness of the bidding process at a joint press conference held last month following the signing of the South Korea-Canada Military and Defense Secret Information Protection Agreement, stating, “I want to confirm that this bid will proceed according to an independent and objective process.”

A Hanwha Ocean official commented, “Procurement policy and methods are at the discretion and authority of the Canadian government.”

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