President Lee Jae Myung listens to HD Hyundai Chairman Chung Ki-sun, third from left, throughout a gathering with enterprise leaders on the presidential workplace in Seoul, Nov. 16. Yonhap
President Lee Jae Myung has pressured the Protection Acquisition Program Administration (DAPA) to pick a shipbuilder for the Korean Subsequent-Era Destroyer (KDDX) venture by means of an open aggressive bidding course of reasonably than awarding a sole-source contract to HD Hyundai Heavy Industries (HHI), which drafted the fundamental design.
With Protection Minister Ahn Gyu-back additionally opposing the company’s push for a sole-source deal, expectations are rising that Hanwha Ocean might be allowed to affix the 7.8 trillion received ($5.3 billion) program to construct six 6,000-ton destroyers by 2030.
Throughout a gathering on Friday with residents in South Chungcheong Province, Lee warned DAPA Minister Lee Yong-chul in opposition to signing a sole-source contract with an organization penalized for its workers leaking army secrets and techniques, calling such a transfer “ridiculous.”
Though Lee didn’t title the corporate, his remarks had been extensively interpreted as referring to former HD HHI workers who stole conceptual destroyer designs from Daewoo Shipbuilding & Marine Engineering (DSME) — now Hanwha Ocean — between 2012 and 2015. After their convictions had been finalized in December 2023, HD HHI obtained a 1.8-point deduction in authorities bids by means of the tip of 2026.
HD HHI has since tried to safe a sole-source contract for the detailed design and development of the primary KDDX-class destroyer, citing precedent that the corporate in control of the fundamental design usually receives the follow-on contracts.
Hanwha Ocean, nonetheless, has pushed for an open bidding course of that may enable a number of shipbuilders to take part, calling a sole-source deal inconsistent with the penalties imposed on HD HHI.
A rendering of the Republic of Korea Navy’s next-generation destroyer / Courtesy of HD Hyundai Heavy Industries
Ahn additionally supported Hanwha Ocean’s place throughout his time as a lawmaker, saying the lead contractor needs to be chosen by means of competitors. Lawmakers from the ruling Democratic Get together of Korea likewise criticized DAPA’s plan earlier this 12 months as corrupt after the company reviewed its contracting method in March.
In response, DAPA is now reportedly contemplating asking each shipbuilders to collectively design the KDDX-class destroyers to bolster cooperation in abroad markets. The 2 corporations agreed earlier this 12 months to collaborate on naval exports regardless of their rivalry at dwelling.
Based on sources near the matter, DAPA plans to finalize its determination on the contracting technique on Dec. 18.
“Everybody desires this wrapped up as quickly as attainable,” the protection minister stated when requested in regards to the KDDX venture on Wednesday.
HD HHI completed the fundamental design in late 2023, and DAPA initially aimed to finish the detailed design and begin development of the primary ship final 12 months. Nonetheless, two years have handed with little tangible progress, partly because of the ongoing rivalry between HD Hyundai and Hanwha.
