HD HHI to Duel with Hanwha Ocean for 800-billion-won Tender
Korean shipbuilding giants HD Hyundai Heavy Industries (HHI) and Hanwha Ocean will compete for an order worth 800 billion won for new-generation frigates. The shipbuilder that wins the order is expected to gain an advantage in bidding for major follow-up warship projects such as the Korea Destroyer Next-Generation (KDDX).
The Defense Acquisition Program Administration (DAPA) will hold a tender for Frigates 5 and 6, the last batch of the Ulsan-class Batch-III Project, according to defense industry sources. The project budget for the two frigates is 833.4 billion won (US$633.5 million), and HD HHI, Hanwha Ocean, and HJ Heavy Industries will all participate in the tender. The agency plans to evaluate each company’s proposal and select a preferred bidder as early as July.
The project is to replace the aging fleet by building six next-generation 3,500-ton frigates, which are considered mini-Aegis ships. Shipbuilders for the previous four battleships were already selected.
HD HHI was awarded the contract for the first ship (lead ship) worth 400 billion won in March 2020. The first ship, the Chungnam, is currently going through a test operation and is expected to be delivered to the Korean Navy late next year.
The second, third and fourth ships were ordered from mid-sized shipbuilder SK oceanplant for between 330 billion won and 350 billion won. The company reportedly won the order for the three through a price war. At the time, there was a controversy over the lowest bid method set by the DAPA, so DAPA changed the selection method from evaluating proposals centered on technical capabilities rather than on prices.
With the change in the evaluation method, both HD HHI and Hanwha Ocean are confident of winning this order.
Hanwha Ocean presented a mock-up of a frigate equipped with the latest combat systems, highlighting synergies with the group’s defense affiliates. The combat system developed by Hanwha Systems minimizes underwater radiation noise.
HD HHI is also confident about winning this order based on its experience of building the first ship. HD HHI’s model features a four-sided fixed multifunctional phased array radar capable of 360-degree detection, tracking, and response that enhances its air defense capabilities.
Note: Article by Kim Eun-jin (www.businesskorea.co.kr)