BANGKOK — The long-troubled procurement of Chinese submarines, stemming from a G2G contract during Thailand’s military government, has reached a conclusion and is being presented to the current elected government’s cabinet meeting.
It seems Thailand has limited options, as the key issue of desiring German-made engines, which became prohibited in 2020 due to EU sanctions on China, was actually a weakness in the contract from the beginning.
Admiral Cholathit Navanugraha, Assistant Commander-in-Chief of the Royal Thai Navy and Chairman of the Submarine Procurement Committee, explained that since the Navy signed the contract in 2017, it specified the procurement of MTU 396 diesel engines to power the submarines’ generators. The contract with China only specified the engine code, not that it must be purchased from Germany.
In 2021, China notified that they couldn’t procure engines with this code and would use CHD 620 instead. The Navy has been trying to resolve this issue since then, including sending a 23-person team to test the Chinese engines, which were confirmed to meet the original specifications.
Admiral Cholathit stated that the Navy has considered this professionally and carefully, as they will be using the submarine for at least 40 years. They’ve accepted time extensions and negotiated compensation to appropriate levels, believing this is the best way to continue the project.
Regarding why they don’t cancel the contract since China breached it, he explained that this involves international cooperation and relations. When China couldn’t procure the equipment, both sides negotiated to find a solution together.
“It’s like building a house and not getting the roof we wanted. We don’t stop building; we just consider if the new roof is reasonable. So the narrative that China is at fault and we should cancel isn’t accurate. If the replacement engine truly wasn’t suitable, we wouldn’t accept it,” the Assistant Commander said.
Currently, Thailand has paid China 10 out of 18 installments, or 60%, amounting to 7,700 million baht, with 40% or 5,500 million baht remaining.
The submarine construction in China for the Thai Navy is 64% complete. Thai Navy officials inspect in China after each work phase and pay accordingly. The submarine is expected to arrive in Thailand around January 2028. Guarantee period for the engines will be extended from 2 to 8 years.
“The Navy confirms that submarines are necessary to maintain maritime sovereignty and protect marine resources worth 24 trillion baht, as well as sea transportation routes,” Admiral Cholathit stated.
Therefore, the document signed by Defense Minister Sutin Klungsang proposing to the cabinet has two main points:
- The Navy requests to amend the agreement by changing the diesel engine from the German-made MTU 396 to the Chinese-made CHD620.
- They request an extension of 1,217 days for submarine delivery and authorization for the Navy to make future changes and for the Navy Commander to sign the amended agreement.
When asked about news that China would stop selling submarines to Thailand and sell to Indonesia instead, Admiral Cholathit confirmed this was untrue, having verified with CSOC, the Chinese government representative.
_______
