South Korea jostles with Germany for US$39 billion Canadian submarine deal
The South Korean government and defence players are making last-ditch efforts to win Canada’s next-generation submarine project worth up to 60 trillion won (US$39.14 billion), as Ottawa is expected to select a preferred bidder by the end of this month. Under the Canadian Patrol Submarine Project, the Royal Canadian Navy’s ageing fleet of four Victoria-class submarines will be replaced with 12 new 3,000-tonne diesel-electric vessels. The comprehensive contract includes long-term maintenance,...
By The Korea Times
The South Korean government and defence players are making last-ditch efforts to win Canada’s next-generation submarine project worth up to 60 trillion won (US$39.14 billion), as Ottawa is expected to select a preferred bidder by the end of this month.
Under the Canadian Patrol Submarine Project, the Royal Canadian Navy’s ageing fleet of four Victoria-class submarines will be replaced with 12 new 3,000-tonne diesel-electric vessels. The comprehensive contract includes long-term maintenance, repair and overhaul (MRO) life cycles.
With a decision looming, Seoul has elevated its bid to top-tier head-of-state diplomacy, seeking to give South Korea’s consortium, led by Hanwha Ocean, an edge over rival bidder TKMS of Germany – a traditional heavyweight in submarine technology – in the closely contested race.
President Lee Jae Myung recently provided critical diplomatic backing during a bilateral summit with Canadian Prime Minister Mark Carney on the sidelines of the Group of Seven summit in Evian-les-Bains, France. Lee said he emphasised South Korea’s readiness to contribute to Canada’s defence capabilities, but acknowledged during a Friday press conference that the outcome remains difficult to predict.
Hanwha Ocean’s bid centres on the 3,000-tonne Dosan Ahn Chang-ho, a KSS-III-class submarine built by its predecessor Daewoo Shipbuilding & Marine Engineering. The company has proposed delivering the first four vessels to Canada by 2035 and completing all 12 by 2043.
Unlike TKMS’ paper design, the KSS-III’s main selling point is its proven track record, as it is already actively deployed and operated by the South Korean Navy.
Moon Keun-sik, a professor at Hanyang University’s Graduate School of Public Policy and a former South Korean submarine captain, believes Seoul holds a slight technological edge.
“In terms of submarine performance and operational combat capability, Korea is on par with or slightly ahead of Germany,” Moon said. “The Dosan Ahn Chang-ho is a proven, operational 3,000-tonne vessel, whereas Germany would have to build its proposal from scratch.”
While technical specifications account for roughly 20 per cent of Canada’s evaluation, the remaining 80 per cent hinges on factors such as MRO capabilities and industrial cooperation – areas in which Hanwha also believes it has a competitive edge.
“The Korean government’s recent strong commitment to supporting the hydrogen and energy sectors with Canada may tip the scales in our favour,” he said, adding that recent joint naval drills involving the South Korean Navy’s Dosan Ahn Chang-ho in Canadian waters have generated highly favourable sentiment among both the Canadian public and military.
However, Moon cautioned that Germany and Canada’s shared Nato membership remains a significant political obstacle for Seoul.
To offset that disadvantage, the Hanwha-led “Team Korea” has pitched an extensive industrial cooperation package spanning hydrogen, liquefied natural gas, aerospace and crude oil, backed by roughly 75 memorandums of understanding signed with Canadian firms.
Most notably, Seoul unveiled Hyundai Motor Group’s Project Beaver investment initiative worth around 4 trillion won. Under the proposal, the South Korean carmaker would establish a comprehensive hydrogen mobility ecosystem – including hydrogen liquefaction plants, fuelling stations and a hydrogen truck manufacturing facility – in Canada, if South Korea secures the submarine deal.
Yang Uk, a research fellow at the Asan Institute for Policy Studies, questioned whether South Korea’s proposal aligns with Canada’s strategic goals.
“Canada’s primary concern goes beyond mere hardware manufacturing,” Yang said.
“They seek deeper naval cooperation and interoperability across the Arctic region. Germany already maintains robust naval ties with Canada under the Nato framework in the area. Against the backdrop, Berlin remains better positioned than Seoul in terms of both long-term naval cooperation capacity and strategic alignment.”
This story was first published by The Korea Times