South Korean Firm Vows Swift Delivery in Canadian Submarine Bid

The competition to secure a lucrative contract for Canada’s new fleet of submarines intensified on Wednesday as South Korean company Hanwha Ocean Ltd. reaffirmed its commitment to deliver submarines more rapidly than its German competitor, ThyssenKrupp Marine Systems (TKMS). The Canadian government recently narrowed the bidding field to these two shipyards, with the contract potentially exceeding $20 billion.

The announcement was made by Prime Minister Mark Carney during a visit to Berlin, where he met with German Chancellor Friedrich Merz. Following the meeting, Carney toured the TKMS shipyard and indicated plans to visit the Hanwha facility in South Korea this fall. The decision to limit bidders was praised by Hanwha Ocean, which expressed gratitude for the government’s recognition of both companies’ capabilities in meeting the requirements of the Canadian navy.

In a statement, Hanwha Ocean highlighted its offering of the KSS-III military submarine, which it claims can fulfill Canada’s needs more efficiently. The company proposes to deliver four completed submarines before 2035, provided that a contract is awarded next year. Alongside its partner, Hyundai Heavy Industries Ltd., Hanwha emphasized the potential for cost savings, estimating around $1 billion due to reduced maintenance and support expenses associated with retiring Canada’s aging Victoria-class fleet.

The competing timeline for submarine delivery has become a focal point in this bidding process. TKMS indicated that it could deliver the first submarine by 2034, with a second following in 2037. In contrast, Hanwha Ocean asserted its ability to deliver not only the first four submarines prior to the retirement of the current fleet but also an additional eight submarines at a rate of one per year, allowing for a complete fleet of twelve submarines by 2043. Hanwha stated, “No other option can come anywhere close to this delivery schedule.”

As the Canadian government reassesses its military procurement strategies, Hanwha Ocean is keen to position itself as a reliable partner. The Liberal government aims to diversify Canada’s defense relationships and bolster the domestic economy, and Hanwha’s commitment to establishing a long-term partnership in defense, space, sustainable energy, and critical minerals aligns with these goals.

Carney reiterated his dedication to a fair and transparent selection process as the federal cabinet considers whether to request further detailed proposals from the bidders or to initiate negotiations with a preferred company. A decision on the winning bid is not anticipated until next year at the earliest.

The importance of various factors, including the delivery schedule, interoperability, and industrial benefits for Canada, will influence the final decision. Defence Minister David McGuinty acknowledged the complexity of the evaluation process. He stated, “Timeliness will be a factor; interoperability will be another… industrial benefits for Canada will be prominent in whatever proposals come forward.”

One of the challenges facing TKMS is its current engagement in producing twelve submarines for Germany and Norway, which limits its capacity. South Korean defense analysts note the existing supply chain challenges in Europe, particularly as nations grapple with rearming efforts following decades of reduced defense production. Kayla Mijung Kim from the Korean Institute for Industrial Economics and Trade remarked on the constraints facing European countries in sourcing essential defense components.

As the bidding process continues, both Hanwha Ocean and TKMS will be closely monitored by officials and stakeholders alike, each vying for a crucial role in revitalizing Canada’s naval capabilities.