Home > National > Defense

Britain, Norway enter Korea-Germany bidding for $40B Canadian submarine project

Published: 10 Mar. 2026, 14:34

CHO YONG-JUN
[email protected]

Hanwha Ocean's KSS-III Batch II submarine [HANWHA OCEAN]

The high-stakes competition between Korea and Germany for a 60 trillion won ($40 billion) submarine contract with the Canadian Navy has become more complicated.

The bid to build 12 submarines is also turning more multinational as Britain is backing Hanwha Ocean through a strategic partnership with Babcock International — the British defense giant currently responsible for maintaining Canada’s submarine fleet. Germany’s bid, meanwhile, is being aided by Norway, which has already purchased German Type 212CD submarines.

Babcock Canada, a subsidiary of Babcock International, currently responsible for the Royal Canadian Navy's ongoing submarine sustainment contract, formed a partnership in late January with Hanwha Ocean for the project bid.

The two parties' proposed solution includes the establishment of a sustainment framework that enables long-term employment for Canadian maintenance staff currently working for Babcock Canada, along with skill transfers and supply chain integration.

Colin Crooks, the British ambassador to Korea, also pitched in, visiting Hanwha Ocean's Geoje shipyard in South Gyeongsang on Feb. 27. Ambassador Crooks had a chance to look at the KSS-III Batch-II submarines currently being constructed at the shipyard. British-made parts, including the torpedo launcher, weapon control system and CO2 removal units, will be fitted to the submarines.

The ambassador praised the agreement between Hanwha Ocean and Babcock, saying that such a partnership will act as a fundamental framework in the two countries' future defense cooperation.

Formally known as the Canadian Patrol Submarine Project (CPSP), the defense initiative looks to replace the country’s aging Victoria-class fleets with state-of-the-art diesel-electric vessels. Out of the estimated 60 trillion won budget, the submarines themselves only account for 20 trillion won, with the remainder heavily allocated toward life cycle maintenance, training, infrastructure upgrades and offset investment packages — a trade element under which a winning bidder is expected to offer industrial benefits.

Hanwha Ocean, alongside its Hanwha Group affiliates and HD Hyundai Heavy Industries (HHI) have offered to buy Canadian steel, import “trillions of won” worth of Canadian crude oil and co-develop AI models and satellites. Hyundai Motor Group — structurally unrelated to HD HHI — has also reportedly offered to build hydrogen infrastructure in Canada.

With Germany also offering a similar offset deal, receiving incentives from both countries, if possible, sounds like a no-brainer for Canada. It also allows Canada to fasten the delivery dates, receiving submarines from both countries simultaneously.

The KSS-III Batch I submarine, constructed by HD Hyundai Heavy Industries [HD HYUNDAI HEAVY INDUSTRIES]

There were even rumors of Canada splitting the contract in half, awarding both Korea and Germany for the submarine bid.

The report, citing two senior Canadian government sources, said the country is “looking at buying” six submarines from Korea’s Hanwha Ocean-led team and the other six by Germany’s TKMS, formerly known as ThyssenKrupp Marine Systems.

The purported plan is to station Hanwha Ocean’s KSS-III CPS submarines positioned in the Pacific, closer to Korea, while TKMS’s Type 212CD-class submarines will be sent to the Atlantic coast, closer to Europe.

Korea's Minister of Trade, Industry and Resources Kim Jung-kwan, however, said Canada had no such plans.

"I asked Canada during my visit, and they told me they currently do not plan on doing so," he said at the National Assembly on Monday.

BY CHO YONG-JUN [[email protected]]