Thailand considers barter trade with China for submarine amid procurement issues

The Defence Minister of Thailand revealed that the government is considering various alternatives, including a barter trade arrangement or the purchase of fertilisers from China, to resolve the ongoing issues concerning the procurement of a submarine for the navy. Sutin Klungsang spoke on the matter at a seminar discussing Thai security and geopolitical challenges, hosted by Rangsit University’s College of Social Innovation.

The debate comes as the Royal Thai Navy wraps up joint exercises with China today. Blue Streak 2023 aims to facilitate the sharing of naval expertise, prepare for potential humanitarian assistance and disaster relief situations, and strengthen military relations between the two countries and involved naval ships and submarines from China and Thailand.

Sutin was questioned about the problematic submarine engine, to which he responded by advising the navy to assess the necessity of the procurement. He suggested that if the navy deems the Chinese-made engine unsuitable, further discussions with China should be initiated to explore potential solutions. These could include the purchase of a surface ship, or even abandoning the contract altogether and opting to import cheaper fertilisers from China instead.

“Other options, such as a barter trade deal, should be considered. But we still have to look at whether these options are in line with the law.”

Sutin added, though, that a definitive resolution hasn’t been achieved yet, and more discussions will be required. The Defence Minister indicated that the situation might require a dialogue with China for the procurement of fertilisers.

“This matter will be presented for consideration by the prime minister.”

Sutin had previously expressed optimism that the incoming government would negotiate a new agreement with Germany and China regarding the engine for Thailand’s new submarine, currently under construction in China. He stated that such a deal would prove beneficial for all parties.

The S26T Yuan-class submarine was initially scheduled for delivery to Thailand from China this month. However, due to the pandemic, the delivery has been delayed until next April.

The submarine is being built by China Shipbuilding & Offshore International Co (CSOC) under a government-to-government agreement. The company offered a CHD620 engine after Germany declined to sell its MTU 396 diesel engine to China, as it is classified as a military-defence item.

Sutin mentioned that further details concerning military reform would be clearer when he resumes work at the Defence Ministry on Wednesday, reports Bangkok Post.