Deadline day: $20B submarine showdown puts Korean and German bids in spotlight
CBC
Canada's seemingly breakneck effort to replace its aging submarine fleet hits an important milestone on Monday with the deadline for both the South Korean and German shipyards to submit their formal proposals in the more than $20-billion program.
The federal plan to buy as many as 12 submarines for the Royal Canadian Navy has evolved rapidly over the last year into one of the most consequential procurement battles in a generation.
It is a contest that will shape the navy's undersea reach, Canada's Arctic posture and the country's industrial alliances for decades.
The two bidders are Hanwha Ocean of South Korea and TKMS (ThyssenKrupp Marine Systems) of Germany.
Both companies and their respective governments have been told to expect a relatively swift decision by Prime Minister Mark Carney's government, with a selection being made as soon as late June, several sources told CBC News.
Between now and April 6, the federal government has reserved the right to ask both bidders clarifying questions about their submissions, the confidential sources added. After that the plans will be analyzed mostly through the lens of what economic benefits — both direct and indirect investment — can be brought to Canada.
The navy has already said both the South Korean KS-III and the German Type 212CD designs will deliver the capability it needs.
The South Koreans are promising to deliver four submarines by 2035, the year the navy plans to begin retiring its current fleet. The Germans have said publicly they can deliver a boat by 2032 with a steady ramping up of production afterwards.
Glenn Copeland, managing director and CEO of Hanwha Ocean Canada, said in an interview with CBC News that all told, his company's bid can comfortably deliver an average of 25,000 jobs a year in the country over the coming decades — both on the submarine program and through other outside investment.
An additional 15,000 short-term jobs could be created through the construction phase of submarine maintenance facilities, which are to be built in Halifax and Esquimalt, B.C.
"In this particular case, it's not just Hanwha, it is the Republic of Korea and the Republic Korean Navy putting a commitment behind this," said Copeland, who did not outline what went into the calculation.
In January, the Hanwha Group, the parent company of the shipyard, told the Reuters news agency that it could create 200,000 jobs in Canada by 2040 — but similarly did not offer a breakdown.
Copeland said they've heard the economic argument "loud and clear."
In addition, Hyundai Heavy Industries is a partner with Hanwha Ocean on the submarine project. Hyundai is a big proponent of hydrogen fuel technology, and it is considering massive investments in Canada as part of the deal, including a hydrogen fuel innovation hub.
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Canada's seemingly breakneck effort to replace its aging submarine fleet hits an important milestone on Monday with the deadline for both the South Korean and German shipyards to submit their formal proposals in the more than $20-billion program.
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