After a leading Canadian media outlet reported that the Canadian government had selected Germany’s ThyssenKrupp Marine Systems (TKMS) as the preferred negotiating partner for the Canadian Patrol Submarine Project (CPSP), sighs erupted across the domestic industry. However, there are also assessments that the government and Hanwha Ocean demonstrated formidable competitiveness against Germany, the strongest player in the global diesel-electric submarine market.

A defense industry official said in a phone call on the 6th, “A very regrettable outcome,” adding, “I believe the government and Hanwha Ocean nevertheless did their best.” CPSP is a program under which the Canadian government will acquire up to 12 3,000-ton diesel-electric submarines to replace four Victoria-class submarines slated to retire in 2030. It is a large-scale project worth $45,000,000,000 (60,000,000,000,000 KRW). In Korea, Hanwha Ocean entered the race.

From the outset, the prevailing analysis in the industry was that TKMS had the advantage, as Canada and Germany are both members of the North Atlantic Treaty Organization (NATO) and TKMS is the undisputed powerhouse in the global diesel-electric submarine market. However, recent analysis suggested that Hanwha Ocean significantly narrowed the gap by emphasizing price competitiveness, technology transfer, and local cooperation plans.

In particular, by building South Korea’s first 3,000-ton-class submarine, the Jangbogo-Ⅲ, Hanwha Ocean secured design and construction capabilities for large submarines, raising expectations that it had closely chased TKMS on the technical front. The Jangbogo-Ⅲ is equipped with the latest technologies, including an air-independent propulsion system (AIPS) and lithium-ion batteries.

The government also waged an all-out push until the end. President Lee Jae Myung met Canadian Prime Minister Mark Carney at the Asia-Pacific Economic Cooperation (APEC) Summit in Gyeongju last October and pledged strategic cooperation.

Kang Hoon-sik, Chief of Staff of the Office of the President, also visited Canada twice, in January and June, to support the CPSP bid. Regarding the likelihood of success, Kang said, “If you ask me for a score, it is about 50 to 50.”

Hanwha Ocean was tight-lipped. Having recently been selected as the preferred negotiating partner for the detailed design and construction of the lead ship of the Korean next-generation destroyer (KDDX), a $5,850,000,000 (7,800,000,000,000 KRW) project, the company had been hopeful that winning CPSP as well would complete a special-vessel portfolio spanning both destroyers and submarines.

An industry official said, “The government, Hanwha Ocean, and various companies mounted the bid with a ‘one team’ spirit,” adding, “Although we failed to win the order, we have further raised our technological capabilities, so we should keep knocking on the European market.”