Key Takeaways
- Thailand has revived its contract with China for the S26T submarine after initial concerns over engine supply.
- China will provide alternative engines and additional support worth $24.7 million, extending warranty and maintenance terms.
- The submarine’s completion is now due by December 2028, with 64% already finished and significant payments outstanding.
Thailand Moves Forward with S26T Submarine Project
Thailand has confirmed its commitment to the Chinese-built S26T diesel-electric submarine project, which had faced delays due to issues concerning engine supply. The Thai Cabinet approved an amendment to the contract on August 5, enabling the project to proceed after a hiatus since 2021.
Initially ordered on May 5, 2017, Thailand planned to procure three submarines but shifted its order to a single vessel due to budget constraints. Wuchang Shipbuilding Industry Group laid the submarine’s keel in Wuhan on September 5, 2019.
The agreement stipulated the use of German-manufactured MTU 396 diesel engines. However, Germany’s refusal to supply these engines led China to propose the Chinese-made CHD620 engines instead. The Thai government expressed hesitance over the quality of these Chinese engines, prompting the Royal Thai Navy (RTN) to conduct thorough assessments. Following over 6,000 hours of testing on the CHD620V16H6, the RTN concluded that the replacements matched the original specifications without compromising performance.
In a development aimed at re-establishing trust, China agreed to a compensation package valued at $24.7 million, which involves extending the warranty and maintenance support from two years to eight, alongside future equipment and weapons assistance. Although specific weaponry details remain unclear, the RTN is likely to receive heavy torpedoes, sea mines, and possibly anti-ship missiles like the CM-708UNB.
With costs currently at 7.7 billion baht (around $237 million) paid to China Shipbuilding & Offshore International Co (CSOC), Thailand still owes approximately 5.5 billion baht, about 37% of the total submarine cost. The revised timeline sees the submarine scheduled for completion by December 2028, after originally aiming for a 2023 entry into service.
This situation highlights several critical issues, particularly concerning contractual assumptions by both parties, who expected no complications in acquiring the MTU engines. Germany’s refusal stems from a long-standing EU embargo on military exports to China, initiated following the Tiananmen Square incident in 1989. While other nations have bypassed such restrictions, the embargo’s enforcement has become stricter, influencing Germany’s decision to block the sale.
Experts have pointed out that Germany’s hesitance may be influenced by Thailand’s military government, given past refusals of arms sales to countries with similar regimes. Additionally, the necessity for China to meet qualification standards for the engine raises questions regarding the engines currently used in the Chinese submarine fleet.
The ongoing construction of similar submarines by the Pakistan Navy, which will also utilize the CHD620 engines, underlines regional complexities in naval procurement. Thailand’s relationship with China reflects a growing geopolitical shift following its 2014 coup, positioning the submarine deal as not just a matter of military capability but also a strategic diplomatic choice.
This evolving narrative underscores the importance of navigating international defense procurement amidst a backdrop of shifting alliances and regulatory environments.
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