Kim Hyun-bin began his journalism career at Arirang TV from 2012 to 2017, specializing in defense, foreign affairs and the economy. In 2018, he joined The Korea Times, covering society and business, and is currently responsible for embassy affairs.
Hyundai, LIG favored to procure W8 tril. KDDX project
Korean Naval Aegis destroyer patrolling the East Sea. / Yonhap
By Kim Hyun-bin
By Kim Hyun-bin
Major defense companies have been seeking to grab a piece of the 8 trillion won Korea Destroyer Next Generation (KDDX) project due to the enormous scale of the deal and as it will be fully branded as the first modern warship with the “Made in Korea” trademark.
Hyundai Heavy Industries is favored to ink the deal for the blueprint and construction of the vessel, while LIG Nex1 is likely to win the contract for the sonar systems that are embedded in the KDDX for detection and tracking of enemy vessels and submarines.
The Defense Acquisition and Program Administration (DAPA) said it has finished evaluation of the proposal submitted by defense companies for the KDDX bidding, in which Hyundai and LIG Nex1 are said to have rated highest in terms of the vessel's basic design and sonar system, respectively.
The 6,000 ton KDDX is smaller than the 7,600-ton Aegis destroyers, but the state-of-the-art warship is scheduled to be equipped with high-performance gadgets including radar and counter-missile system. The warship's high specs have led to it being nicknamed “Mini Aegis.”
The DAPA plans to construct six KDDX vessels with a budget of 7.8 trillion won ($6.56 billion).
The KDDX basic design bidding application period ended last month with Hyundai Heavy Industries slightly outscoring Daewoo Shipbuilding & Marine Engineering (DSME).
The DAPA is evaluating the two firms and scheduled to announce the preferred bidder later this month.
If Hyundai Heavy procures the deal, an official contract will be signed in October and scheduled to come out with a basic design by the latter half of 2023 and start construction of the first KDDX destroyer starting 2024.
Hyundai has the advantage as it has built some 80 vessels including the country's first Aegis destroyer.
There is a possibility the company that wins the basic design contract could raise a partnership with a competing tenderer to jointly procure the deal.
“It will be difficult for one shipbuilding company to procure the entire KDDX project,” an industry official said. “For the naval procurements there have been incidences where there were different companies procuring the first and latter stages of the construction project.”
In case of the previous KDX project, Hyundai won the KDX-Ⅱ deal while Daewoo was given the KDX-Ⅲ project.
LIG Nex1 is expected to become the prefer bidder to develop the sonar system.
The term of the contract will be effective from this December to October 2029. Sonar systems are employed in submarines and vessels to detect, identify and track enemy vessels and submarines using sound waves.
Current Korean battleships have one fixed sonar on the lower end of the vessel, but the KDDX is expected to be equipped with three sonar systems ― a hull-mount sonar, a towed-array sonar and a system-integrated sonar ― with upgraded detection capabilities.
LIG Nex1 received the highest rating for the towed-array sonar and system-integrated sonar. The hull-mount sonar is expected to be given to STX Engine but LIG Nex1 will join the development as a subcontractor. The development cost of the three sonars is around 120 billion won. Sonar systems require frequent maintenance which will generate additional profits for the companies.