UK Envoy Publicly Backs Hanwha in Canada’s $43 Billion Submarine Contest

Britain’s ambassador to South Korea recently told President Lee Jae-myung that the UK wants to work with Hanwha on Canada’s submarine project, in a public show of support for Hanwha Ocean’s bid.

Babcock Also Stands to Gain as UK Supports Hanwha

Colin Crooks, the British ambassador to South Korea, made the remark while greeting Lee at a dinner for the diplomatic corps at Nokjiwon on the grounds of the former Blue House on June 23. “The UK government wants to work with Hanwha on the Canadian submarine project,” Crooks said. Lee replied with a smile: “Yes, we have to succeed.”

Crooks’s comment went beyond a routine diplomatic pleasantry. Hanwha Ocean has formed a partnership with Babcock Canada for the Canadian submarine project through a memorandum of understanding and a teaming agreement. Under the arrangement, Hanwha Ocean would provide the submarine platform and build the vessels, while Babcock would handle maintenance, repair and overhaul in Canada as well as follow-on support. If Hanwha wins the contract, South Korea would export submarines and the British company would gain opportunities in maintenance, equipment and localization work.

Crooks’s visit to Hanwha Ocean’s shipyard in Geoje in February underscored that support. He toured the construction site for the Jangbogo-III Batch-II submarine proposed for Canada and inspected submarine block production, automated facilities and the company’s smart-yard production system.

Canada’s submarine program, known as the Canadian Patrol Submarine Project, or CPSP, is intended to replace four aging Victoria-class submarines. The Canadian government plans to acquire as many as 12 new submarines to build an undersea force capable of operating simultaneously in the Atlantic, Pacific and Arctic. Industry estimates value the project at about 60 trillion won, or $43 billion.

The competition has narrowed to Hanwha Ocean and Germany’s Thyssenkrupp Marine Systems, or TKMS. Hanwha Ocean is offering the KSS-III model based on the Jangbogo-III submarine, while TKMS is pitching the 212CD class, a joint design developed by Germany and Norway.

UK Tie-Up May Help Offset Hanwha’s Non-NATO Disadvantage

Hanwha’s strengths are delivery timing and operational experience. Hanwha Ocean has proposed delivering four submarines by 2035 if Canada signs a contract. Last month, the South Korean Navy’s Dosan Ahn Changho entered the naval base at Esquimalt in British Columbia, showcasing the KSS-III class’s long-range operating capability.

Canada’s NATO membership remains a variable. TKMS is a German company, and the 212CD is also a joint model developed by Germany and Norway, both NATO members. That means Canada must weigh not only performance, price and delivery schedule, but also alliance interoperability, logistics support systems and the potential for intelligence sharing.

That is where the UK’s role stands out. Britain is a NATO member like Canada and also belongs to the Five Eyes intelligence-sharing group with the US, Canada, Australia and New Zealand. Babcock has been responsible for maintenance, repair and overhaul of Canadian naval submarines and has experience supporting the navy as well as a local supply chain in Canada. In effect, a British defense partner could help make up for Hanwha’s weakness as a non-NATO company.

“If Hanwha Ocean wins the deal, Babcock would also gain business from the project,” a defense industry official said. “The participation of a British company adds NATO credibility and local maintenance experience in Canada to Hanwha’s proposal.”

Kim Da-bin, Hankyung.com reporter davinci@hankyung.com