Defence Minister Sutin Klungsang has recently disclosed his plans to embark on negotiations with China with the intention of reducing the pricing of a particular frigate, following the governmental decision to procure such a ship instead of a submarine. The navy will constitute the negotiating delegation, which is expected to land in China for discussions prior to the expiration of their agreement next month. The role of China in these discussions is, however, yet to be confirmed.
Mr. Sutin, who had a meeting with the navy prior to the trip to prepare essential data for the discussions, made it clear that the government’s priority is to avoid disadvantaging the country and to ensure the best deal is struck. As he explained, the plan is not to amend the contract but to revise the initial agreement, making it a subject of discourse between the navy and the Chinese company.
Last week, the government announced the decision to acquire a Chinese-made frigate to replace a submarine that was ordered in 2017, following revelations that the submarine could accommodate the engine made in Germany as initially requested by Thailand. This shift, however, stirred controversy as the expected cost of the frigate, estimated around 17 billion baht, was higher than the ordered submarine. Detractors are curious as to why Thailand is paying more even when China fails to fulfill its commitments within the contract.
Whilst clarifying that China could not affix the German-made engine to the submarine, Mr. Sutin disclosed that the Chinese frigate is estimated to be 14 billion baht and the tentative 17 billion baht price tag is set based on the price of a European-build frigate.
In response to inquiries whether the navy endorsed this adjustment given the preparations already made towards the submarine, he highlighted that the procurement of the frigate was a contingency plan for the possibility of the submarine project not proceeding. He said that the navy had presented two options to the government: acquiring a frigate or purchasing an offshore patrol vessel (OPV). The government settled for the frigate.
Regarding the question on seeking a refund, Mr. Sutin insisted that the submarine-to-frigate swap discussion is the present focus before considering other arrangements. He further noted that demanding a refund could potentially impact cooperation across other sectors.
Meanwhile, Wiroj Lakkhanaadisorn, a representative of the Move Forward Party expressed his notion on his Facebook page that it would be most beneficial to ask for the 7 billion baht refund from the submarine scheme, and impose a penalty on China for failing to deliver as per contract. Although he stated that the frigate or OPV is a good substitute, he added that the government will also need to assess the factors such as price, maintenance costs, spare parts and more.
He confirmed the navy was invited to speak on this issue at the House committee to offer public clarity. Topic details on the navy’s budget related to the submarine procurement circulated on former election commissioner Somchai Srisutthiyakorn’s Facebook account, hinting that the navy had spent a total of 8.7 billion baht on 11 items related to the project. These expenses were separate from the 7-billion-baht payment made to China, covering navigation charts, hydrographic information for submarine navigation, a torpedo and mine storage facility, a submarine support vessel, and a submarine command and control system.