Thai navy won’t buy Chinese submarine switcheroo, must have German engine — PM Prayut

No engine, no cigar. That’s the hard line Thailand Prime Minister Prayut Chan-o-cha set on Monday regarding the navy’s deal to purchase a Chinese submarine without the most important part — the engine. If China doesn’t include the German-made engine as stated in the purchase agreement, then it’s “Hasta la vista, baby.”

“What do we do with a submarine with no engine? Why should we purchase it? If the agreement can’t be fulfilled, we have to figure out what to do. Isn’t that how we solve a problem?”

PM Prayut made the statements on Monday in response to news that a German manufacturer has declined to provide the necessary MTU396 diesel engines that China needs for the S26T Yuan-class submarine its currently building for the Royal Thai Naval, the Bangkok Post reported.

The PM, who also serves at the nation’s defense minister, said he’s already told the navy to get the deal done. But if China wouldn’t budged, then they’ll throw the dirty deal out the window. He emphasised that canceling it wouldn’t affect Thai-Chinese relations.

As of Saturday, the submarine procurement deal remained unchanged, according to navy commander Adm Somprasong Nilsamai, who said China must comply with the contractual agreement. The deal’s terms stipulate that Germany’s MTU was to supply the sub’s engine.

But the company was prevented from selling the item because of Germany’s embargo on military equipment, which it instated in the wake of WWII. Apparently, the uninformed Thai navy was caught off guard. But with Germany changing its defence policies significantly since Russia invaded Ukraine in February, Thailand might be wanting to “wait and see” if it can get the German-made engine it asked for after all.

This month the navy is set to hold talks with China Shipbuilding & Offshore International Co, or CSOC, in order to resolve the issue, despite its maintaining the engine stipulation in the purchase-agreement, according to navy spokesman Vice Adm Pokkrong Monthatphalin.

Meanwhile, CSOC — the company in building the Chinese sub for Thailand — has reportedly requested to modify the contract to replace the German engines with, you guessed it, Chinese ones. For example the MWM 620, which is supposedly of the “same standard”. But the Thai navy isn’t buying what appears to be a bait-and-switch to China’s financial advantage.

In My 2017, Thailand inked the deal to purchase the Chinese S26T Yuan-class submarine for 13.5 billion baht, with payments to be made in installments over a seven-year period. The first payment of 700 million baht was made in 2017.

Chinese military leaders later persuaded the Thai navy to agree to a more substantial three-sub package deal worth 36 billion baht, which was to be paid off in annual installments over an 11 year timeframe. But the additional two subs were put on hold for four years due to pandemic. They’ve been in limbo ever since.

As for PM Prayut, he maintained that he’d already justified the navy’s purchase of the submarine more than once before, so he wasn’t concerned it would be an issue in the forthcoming no-confidence debate. Meanwhile, the public awaits a possible Thai general election, which the PM could call as early as November this year.

SOURCES: Bangkok Post | NavalPost.com