Experts believe that both sides have distinct strengths and weaknesses, making it difficult to predict the outcome until the last moment.
According to industry sources on June 25, the preferred bidder for the CPSP is likely to be decided soon. The CPSP involves the construction of up to 12 diesel submarines, each weighing 3,000 tons, and includes maintenance, repair, and operations (MRO) for the next 30 years. The total project value is estimated to approach 60 trillion won.
Currently, 'Team Korea,' led by Hanwha Ocean, and Germany's Thyssenkrupp Marine Systems (TKMS) are the final contenders. Initially, there was high anticipation for South Korea's bid based on its price competitiveness and delivery advantages. However, as the deadline approaches, factors such as industrial cooperation and security alliances have emerged as complex variables, making it harder to predict the outcome.
South Korea's strengths lie in its shipbuilding capabilities and extensive industrial cooperation package. Hanwha Ocean has proposed the 3,600-ton Jang Young-sil-class (KSS-III Batch-II) submarine, promising to deliver the first submarine by 2032 and four submarines by 2035, aligning with the Canadian Navy's demand for early operational capability.
In terms of industrial cooperation, South Korea has presented attractive proposals that could generate approximately 144 trillion won in domestic GDP impact. This includes initiatives like 'Project Beaver,' aimed at establishing hydrogen freight truck production infrastructure, and the transfer of lithium-ion battery technology for submarines.
Hanwha Ocean also envisions creating over 22,500 jobs annually and generating around $94 billion in GDP impact if selected as the CPSP contractor, leveraging its existing industrial cooperation network.
Germany is emphasizing its security and alliance values. The 212CD submarine proposed by Germany is a next-generation submarine jointly developed with Norway. If Canada adopts this, it would use the same platform as Germany and Norway, facilitating joint training, maintenance, and supply chain sharing.
Additionally, Germany has reportedly suggested prioritizing some production slots of the 212CD submarines already ordered by the Norwegian Navy for Canada to address delivery issues.
Experts predict that the outcome may hinge on whether the Canadian government prioritizes economic benefits or security alliances. Choi Ji-il, a professor at Sangji University and a researcher at the Korea Defense Industry Research Institute, stated, "Since this is a public competitive bid, we won't know the result until it's revealed," but emphasized that Germany's status as a NATO member within the same security alliance as Canada is a significant variable.
In light of rising military tensions with Russia over the Arctic, it may be challenging for Canada to choose South Korea over Germany, with which it has an established security partnership.
Professor Choi also noted that South Korea's aggressive industrial cooperation proposal might only serve as a 'pace-maker' for Germany to introduce additional conditions. He remarked, "While South Korea's industrial cooperation proposal is quite bold, Canada must also consider not just Germany but the vast security network of the EU and NATO. In the event of a security crisis in the Arctic, which country can provide closer security support will also be a crucial factor in the decision-making process."
Nam Sung-wook, a professor at Korea University, added, "Germany is a core NATO country and shares a sense of solidarity with Canada within the Western security community. There may also be unseen constraints regarding the expansion of South Korean weapons into the European and NATO markets."
However, experts also expressed optimism that if South Korea succeeds in securing the contract, it could symbolize a breakthrough for K-defense in entering the NATO member market, which has high entry barriers. Professor Nam stated, "This project is a pivotal moment for K-defense to reach a higher class. If we can penetrate the submarine market beyond the export of the K9 self-propelled howitzer to Poland, South Korea's standing in the global defense market will be completely transformed."
* This article has been translated by AI.
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