Now that it looks like we're in the EU camp in terms of rearmament (through SAFE) and access to their loan structure, this bit of information coming out of Poland might play out here with our submarine selection as well.
Korea Strives to Win 8 Trillion Won Polish Submarine Modernization Project
Pressured by EU's ‘Buy European’ Policy, Korea Sends Presidential Envoy to Persuade Poland
The Lee Jae-myung administration is making efforts to secure the Polish Navy’s submarine modernization project, which has hit the European Union (EU)'s “Buy Eu
www.businesskorea.co.kr
The Lee Jae-myung administration is making efforts to secure the Polish Navy’s submarine modernization project,
which has hit the European Union (EU)'s “Buy European” barrier, by sending a presidential special envoy to persuade Poland.
According to the defense industry, a presidential special envoy led by Rep. Park Ji-won, a member of the Democratic Party of Korea, visited Poland on July 28-29. The Lee Jae-myung government is the first Korean government to dispatch a presidential envoy to Poland since its inauguration. Lee also sent a presidential envoy to Canada on July 22 to engage in diplomatic efforts for securing the Canadian submarine project.
The envoy’s dispatch to Poland is largely due to the Polish Navy's Orka submarine project. Poland is pursuing the project to introduce three new state-of-the-art submarines. The goal is to modernize the Polish naval forces. The construction cost is estimated at about 3 trillion won, and including ship maintenance and repair projects, the total scale is estimated at 8 trillion won. Eleven shipbuilders have submitted requests for information (RFI) to the Polish government, including France’s Naval Group, Germany’s ThyssenKrupp Marine Systems, Sweden’s Saab Kockums, and Italy’s Fincantieri.
Korean companies had been in a favorable position for winning the contract. Korean shipbuilders had the earliest possible delivery dates, price competitiveness, and technological superiority. Germany, France, and Sweden had proposed participation when Poland first started the project in 2014, but the project itself was canceled as they failed to meet Poland’s requirements. Poland announced the restart of the project in July 2023. Hanwha Ocean proposed the 3,600-ton class Jangbogo-III Batch-II submarine currently under development for the Korean Navy, which is known to be the most advanced and strongest conventional submarine in the world.
However, an obstacle emerged. Under pressure from U.S. President Donald Trump, the European Union (EU) decided to increase defense spending. The EU declared “rearmament within 5 years” and announced a “Buy European” policy, prioritizing the purchase of products within the EU. Ursula von der Leyen, president of the European Commission, stated on March 3 that European weapons would be prioritized when announcing the 800 billion euro “European Rearmament Plan.”
Poland, which had been eyeing Korea, found itself in a difficult position. It could have introduced Korea’s cutting-edge submarines in the shortest time while saving on defense costs, but now it might miss this opportunity. The Polish deputy minister of defense visited Germany and France to inspect submarine technology and evaluate proposals, indicating that the bidding war was turning unfavorable for Korea.
To sway Poland’s decision, the presidential special envoy was dispatched. Hanwha Ocean and HD Hyundai Heavy Industries, which had initially pursued individual bids, agreed to form a single team under the supervision of the Defense Acquisition Program Administration. The presidential special envoy used negotiation cards such as promising perfect localization from local factory construction to maintenance, repair, and operation (MRO), and 1 trillion won reinvestment if Korea’s submarines were purchased. They also persuaded Poland not to contract European weapons immediately to confront the U.S., but to make a practical choice.
In a meeting with the Polish foreign minister, Rep. Park said, “Korean shipbuilding technology is the best in the world. Even President Trump has mentioned this several times,” and added, “In particular, it is highly commendable that Hanwha Ocean and HD Hyundai Heavy Industries, which are competitors, have formed a one-team consortium." Park said the Polish government showed a positive response.
The conclusion of the Polish submarine bid is expected to come at the end of this year. An industry official explained, “Korea was pushed into a defensive position in the bidding war but has reset the game with active government support,” adding, “We hope that Poland will accept Korea’s logic as much as possible."