Cost, Politics Prove Decisive Factors in Royal Thai Navy’s Submarine Selection

Dan Darling, International Military Markets Analyst, Forecast International.

Yuan class diesel-electric submarine
Yuan class diesel-electric submarine

As part of its effort to resurrect a submarine capability after 64 years of dormancy, the Royal Thai Navy has selected a Chinese proposal to provide three submarines at a cost of THB12 billion ($355 million). The Chinese proposal was one of six offers, with the others coming from France, Germany, Russia, South Korea and Sweden. A majority of the 17-member submarine procurement committee appointed by the RTN voted in favor of the Chinese bid, with the remainder split between the bids from Germany and South Korea. In the end, the Chinese-built option was deemed the best value for the money and downselected as the preferred candidate.

While price no doubt factored heavily in the decision, there are other aspects to consider. One is technology transfer to local Thai industry, which, according to one committee member, China expressed a willingness to provide. Another issue is the provision of a training package for RTN submariners – again, an aspect covered by the Chinese bid.

Finally, there is the geopolitical aspect. Since the Royal Thai Army undertook a coup in May 2014 – its 19th in Thailand’s modern history – relations with China have grown warmer, as the military junta ruling the country has incurred rebukes from long-standing ally, the United States, over its actions. Naturally, the ruling junta would prefer to deal with a country and government disinclined to interfere with the internal politics of Thailand.

Nonetheless, the decision to opt for Chinese-built submarines follows previously thwarted attempts by the RTN to ink deals with Germany – for six secondhand Type 206A submarines derived from retired German Navy stocks – and South Korea. Such efforts stretch back to the 1990s and were repeatedly rejected by the final arbiter of Thai military procurement, the Defense Council, in favor of other projects deemed more pressing at the time.

But with the military junta in power, the RTN recognized that its best chance of acquiring a capability it last wielded in 1951 was at hand. Preparation for acquiring submarines had already been underway, with the government providing THB200 million ($5.9 million) for a comprehensive study of a procurement and the RTN officially launching Submarine Squadron at Sattahip naval base in the Chonburi Province on July 7, 2014 – despite not having a single such vessel in its inventory.

The model likely to be provided by China to the RTN is the Type diesel-electric attack submarine 041 (Yuan class in the People’s Liberation Army Navy), itself an indigenous Chinese design influenced by the Russian Project 636.

The proposed purchase will be submitted to the governing cabinet for approval in July, following an earlier rejection in April by Prime Minister Prayut Chan-o-cha, who ordered the RTN to conduct more studies before re-submitting its plan. Deputy Prime Minister and Defense Minister Prawit Wongsuwon is an outspoken supporter of a submarine purchase, citing regional pressures, a broadened maritime mission portfolio for the RTN, and the increasing deployment of submarines by neighboring countries.

But the financial weight of a submarine acquisition to the capital portion of Thailand’s defense budget must be taken into consideration as well, as it will most likely serve as the deciding factor in any cabinet decision on the project. Ultimately that is why the cost factor served as the submarine procurement committee’s primary signpost on the road to its decision.

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