Shipbuilding industry officials said Thursday that HD Hyundai Heavy did not participate in either of the two recent tenders for the KDDX Batch II concept design. Under current rules, if a tender fails twice, the government can sign a private contract with the sole bidder, increasing the likelihood that Hanwha Ocean will take the concept design work.
KDDX is a national project to invest about 7.8 trillion won to secure six 6,000-ton Korean Aegis destroyers by 2030. KDDX Batch II is a follow-on model to the existing KDDX and is an early-stage effort to outline a future next-generation destroyer program.
Concept design sets basic performance, weapons systems, radar configuration and hull form, and is considered a research-and-development step before full commercialization. Shipbuilding proceeds through concept design, basic design, detailed design and lead-ship construction, and then follow-on ship construction.
Industry observers said HD Hyundai Heavy’s decision appears aimed at concentrating resources on the main competition, particularly the basic design phase. Basic design is widely viewed as the core stage, and in past naval programs the company responsible for basic design has typically carried work into detailed design. In the earlier Batch I program, Hanwha Ocean handled concept design and HD Hyundai Heavy took basic design.
Some in the industry said the latest nonparticipation is unlikely to significantly weaken HD Hyundai Heavy’s competitiveness in the broader program.
The decision may also reflect internal restructuring after HD Hyundai Heavy merged with HD Hyundai Mipo, integrating its naval vessel and mid-sized ship businesses. With both special-purpose and commercial ship lines to manage, the company may be prioritizing larger, more profitable contracts over pursuing multiple projects at once.
HD Hyundai Heavy said the move does not mean it is abandoning the program. “Concept design is a pre-commercialization stage, and we have made participation decisions differently depending on business conditions,” a company official said.
The Defense Acquisition Program Administration plans to accept KDDX proposals through May 15 and select a final contractor in July. Under the original plan, basic design was to be completed in December 2023, with detailed design and lead-ship construction starting in 2024, but the agency has been unable to reach a conclusion amid intensified competition between the two companies, delaying the project for a second year.
* This article has been translated by AI.
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