Industry Minister Kim Jung-kwan expressed confidence in the competitiveness of Korea’s submarine bid for Canada’s multibillion-dollar fleet renewal initiative.
He warned that increasing geopolitical tensions and Ottawa’s focus on NATO interoperability might influence the final choice, with Germany being the other candidate.
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Hanwha Ocean is vying with Germany's TKMS for the $39 billion initiative to modernize the Royal Canadian Navy's outdated fleet of four Victoria-class submarines by providing 12 new 3,000-ton diesel-electric submarines, with the contract including long-term maintenance, repair, and overhaul (MRO) services.
“If (Korea) wins, it would suggest that Canada placed greater weight on the industrial cooperation package than on NATO considerations,” the minister said during a press briefing at Government Complex Sejong.
“Given the competitiveness of our submarines, a loss would indicate that Canada opted to prioritize NATO.”
“Objectively speaking, we believe that the competitiveness of the submarine itself and the competitiveness of the industrial package are better on our side,” he says.
"But that does not mean the decision will be made based only on those factors. I think that is why our president said we cannot be reassured, and we think the same way.”
The initiative is viewed as a crucial chance for Korea’s shipbuilding industry and a path to broaden its defense presence in North America. The Canadian government is anticipated to choose a preferred bidder by the conclusion of this month.
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Though Kim highlighted Korea's commercial and technological advantages in the bid, he recognized that wider strategic factors from Canada could significantly influence the results.
“Given the current war and other situations (globally), Canada may feel the need to strengthen cooperation with NATO, since it is also a NATO member,” he says.
“If those considerations carry more weight than industrial cooperation, it would be difficult for us to win, though it would be regrettable.”
The minister stated that the changing global security landscape has inevitably rendered the decision more strategic for Canada.
Kim also suggested the potential for a divided contract for the 12 submarines shared between Korea and Germany.
“There is speculation even in Canada about a potential split award, alongside expectations that the decision could slip beyond June (when the preferred bidder is originally expected to be announced),” he says.
“But we have not received any official communication (from Canada), so for now we are waiting until the end of June.”
The minister stated that finalizing the submarine agreement would be strategically important beyond short-term economic benefits, as it would enhance industrial relations between Canada and Korea and broaden collaboration in energy and other essential sectors.
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“In the longer term, there is potential to expand cooperation with Canada on Arctic shipping routes, so we are taking a broader perspective rather than focusing solely on the number of submarines," he says.