ThyssenKrupp Marine Systems (TKMS) of Germany was selected as the preferred bidder for Canada's next submarine program (CPSP), worth up to 60 trillion won. Korea, led by Hanwha Group, presented submarine competitiveness and a large-scale industrial cooperation package, but failed to overcome the wall of the North Atlantic Treaty Organization (NATO) alliance.
Prime Minister Mark Carney of Canada officially announced the result on the 6th (local time) in Halifax, Nova Scotia, in eastern Canada. CPSP is a program to introduce up to 12 new diesel submarines to replace the four Victoria-class submarines scheduled to retire in the mid-2030s. Adding maintenance, repair and operations (MRO) expenses over the next 30 years to the shipbuilding costs, the total program is estimated to reach up to 60 trillion won.
Hanwha Ocean, together with HD Hyundai Heavy Industries, made the shortlist of qualified candidates and went head-to-head with Germany's TKMS, but ultimately came up short. The Jangbogo-III-based platform proposed by Hanwha Ocean was assessed as highly competitive in terms of independent design and construction capabilities, a stable delivery track record, and performance relative to expense. Hanwha Ocean proposed delivering the first boat in 2032, based on signing a contract this year, and supplying four boats by 2035.
On top of that, Hanwha Group strengthened its local network by partnering with corporations and institutions in Canada and pledged $70 billion Canadian dollars (about 75.4 trillion won) in trade and investment by 2044. The annual job creation effect alone would reach 25,000. The government as well as Hyundai Motor Group also put forward various cooperation cards.
TKMS proposed the 2,800-ton-class "212CD," which it is co-developing with Norway. This also meets the operational requirements demanded by the Canadian military. Germany likewise proposed a large-scale economic package, including generating $86 billion Canadian dollars (about 92 trillion won) in gross domestic product (GDP) and creating more than 650,000 jobs.
Analysts say NATO alliance considerations ultimately led Canada to side with Germany in this bidding war. As U.S. security commitments to NATO have weakened and various wars have destabilized the international situation, Canada is seen to have calculated that it must strengthen cooperation with Germany, a NATO member. The fact that Prime Minister Carney released the preferred bidder announcement immediately before attending the NATO summit in Türkiye on the 7th adds weight to this interpretation.
Hanwha Ocean said, "We put our utmost effort into the bid based on the government's full support, the outstanding performance of our submarines, and the navy's successful submarine operation experience, but we could not overcome the wall of the NATO alliance," adding, "Although we have many regrets because we approached it with the attitude of 'doing our best,' we believe this result is entirely due to Hanwha Ocean's shortcomings."
It added, "We will closely analyze the tasks identified through this competition, devise definite alternatives, and surely find a way for 'K-maritime defense' to make a greater leap in the global market."
However, Prime Minister Carney said that if negotiations with TKMS break down, talks could begin with Hanwha Ocean, the runner-up.