Canada may split $39B submarine contract between Korea, Germany if decision slips past June
Seoul says its offer is stronger on delivery and industry, but security politics may shape whether Korea wins all 12 submarines or shares the order with Germany.
The 3,000-ton ROKS Dosan Ahn Chang-ho enters the Canadian naval base in Esquimalt, Victoria, on May 23, marking the first trans-Pacific voyage ever undertaken by a Korean submarine.
REPUBLIC OF KOREA NAVY
With Canada set to announce its decision on a submarine contract worth up to 60 trillion won ($38.9 billion) by the end of this month, Industry Minister Kim Jung-kwan raised the possibility of a split contract between Korea and Germany.
Should Canada delay its decision past June, each country could receive orders for six submarines, according to Kim.
"We have also received reports from local sources that if a decision is not reached by the end of June, it could signal that Canada is moving toward a divided contract between the two countries," he told reporters at a briefing held in Sejong on Monday.
Korea's Hanwha Ocean and HD Hyundai Heavy Industries are competing against Germany's TKMS for the Canadian Patrol Submarine Project, with the Korean side pushing faster delivery timelines and a stronger industrial contribution package. The program calls for replacing Canada's four aging Victoria-class submarines with 12 new diesel-electric vessels.
President Lee Jae Myung, who met with Canadian Prime Minister Mark Carney during the recent Group of 7 summit in France, struck a cautious note at a following press briefing, saying he is "hopeful but not optimistic" — a remark that underscored how competitive the race remains.
Asked to elaborate on the president's comments, Kim said Canada may feel a stronger need to deepen NATO cooperation given current conflict and security tensions, and that such considerations could end up outweighing industrial cooperation factors in the final evaluation.
"From Korea's perspective, the submarines themselves and the accompanying industrial package are objectively superior," he added. "But the concern is that Canada may not base its decision on those merits alone."
Kim also briefly addressed the status of Korea's U.S.-bound investment initiative, part of Seoul's $350 billion investment pledge to the United States. A state-run company, Korea-U.S. Strategic Investment Cooperation, was established last Thursday to oversee the effort. Specifics, however, remain undisclosed.
"The project is moving forward," Kim said. "Whether a single project will be announced first or several simultaneously will depend on how the situation develops."
BY LEE JAE-LIM [[email protected]]
