Thailand’s Royal Thai Navy Cancels Chinese Submarine Deal

Thailand revealed months after signalling its intention to purchase a submarine from China that it had opted to end the purchase owing to the unavailability of a German engine and instead acquire a Chinese frigate.

Due to the unavailability of a German engine, Thai Defence Minister Sutin Klungsang recently revealed that the Royal Thai Navy has ordered a Chinese frigate instead of proceeding with the planned procurement of a Chinese Yuan-class submarine.

This does not, however, inevitably imply that the submarine purchase has been cancelled. Sutin stated during a visit to the Naval Headquarters that the country was not abandoning the submarine contract with China. It has been put on hold until an undefined later time when it is ready.

“The submarine project will not be scrapped, but will be put on hold for a while…When the country is ready, it will restart.” The minister did not provide a timetable for getting the submarine acquisition back on track.

The initial agreement to purchase the S26T Yuan-class submarine with MTU-396 diesel engines of German manufacture was drafted in 2017. However, problems arose after Germany cancelled the agreement, citing governmental limits that prohibited the intended engines from being used in any Chinese military equipment.

The transaction eventually came to a halt when Thai Prime Minister Prayut Chan-o-cha threatened to cancel it if the Chinese could not install the German-made MTU-396 diesel engines stated in the original purchase agreement.

To keep the deal alive, Beijing proposed a local alternative and reverse-engineered Chinese-made engines, CHD620, manufactured by China’s state-owned submarine maker and approved by German MTU. Several hard-fought negotiations ensued, during which the Chinese representatives insisted on using their engine.

Thailand is known to have rejected a Chinese-made submarine engine, ostensibly due to quality issues. The Royal Thai Navy also indicated that it will adhere to the original contract stipulations, which it believes are non-negotiable.

“What do we do with a submarine that doesn’t have any engines?” “Why should we buy it?” In April 2022, Prayut informed journalists.

In April 2017, the Thai government approved the purchase of three Yuan-class submarines from China for US$1.05 billion. However, due to budget limits, only one submarine worth $403 million could be purchased, while the other two were cancelled. The single submarine was originally scheduled to be delivered in 2024.

Although the submarine deal has been stuck for several years despite Beijing’s intense lobbying and assurances to the Thai junta government, the recent announcement may come as a surprise given Thailand’s earlier hint that it might go ahead with the purchase with Chinese-developed engines.

EurAsian Times stated in June of this year that, with no signs of a turnaround by German authorities, the Thai government was actively evaluating the Chinese engine on offer. At the time, unidentified sources said Thailand was in negotiations with Pakistan over the quality of its fleet of Chinese-made submarines outfitted with Chinese engines.

Last month, former Navy Chief Admiral Choengchai Chomchoengpaet stated that he will ask the cabinet to sanction a submarine with a Chinese engine. The Thai government, on the other hand, looks steadfast in its determination to obtain the initially specified German-powered submarine.

The government promptly directed the Navy to revise its project plans. This resulted in two proposals: the first asked for the purchase of an offshore patrol vessel, while the second called for the purchase of a frigate outfitted with anti-submarine weapons and systems.

The government and defence minister opted to pursue the frigate option, despite the fact that it would have cost 17 billion baht, or one billion baht more than the proposal to purchase submarines.

“The frigate option will compromise the Navy’s capabilities slightly when compared with the submarine project, but the Navy can accept it,” the secretary of defence said. He did not, however, disclose which Chinese frigate the Royal Thai Navy was considering purchasing in the future.

Furthermore, the minister stated that he was aware that the building of the ordered submarine had progressed and was nearing completion. He emphasised that China would figure out what to do with the ship quickly because the acquisition would not go through for the time being.

The Chinese have displayed well-known reverse engineering talents in order to develop their system using technology obtained from other countries. The paucity of examples of homegrown propulsion technology may explain Thailand’s reservations regarding Chinese engines.

Although Beijing has yet to issue an official statement, the country is not anticipated to be pleased. Although Thailand has stated that cancelling the purchase will have no impact on bilateral relations, China has more at stake than simply selling one submarine to Thailand. China’s inability to supply the submarine with the original engine, as well as the breakdown of the agreement, would jeopardise future submarine deliveries.

Despite this, reports indicate that Chinese President Xi Jinping and Premier Li Qiang discussed this idea with Prime Minister Srettha Thavisin earlier this week in Beijing. Both presidents agreed to think over the Thai idea.

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