Hanwha Ocean picked as preferred bidder for $5.1 bil. Navy destroyer project
Hanwha Ocean's shipyard in Geoje, South Gyeongsang Province / Korea Times photo by Kim Hyeong-joon
Hanwha Ocean Co. said Thursday it has been selected as the preferred bidder for Korea's next-generation Navy destroyer project worth 7.8 trillion won ($5.1 billion).
In a regulatory filing, Hanwha Ocean said the state-run Defense Acquisition Program Administration (DAPA) notified the company of the selection on Wednesday.
Hanwha Ocean beat rival HD Hyundai Heavy Industries Co. to lead the Korea Destroyer Next Generation (KDDX) program, which aims to build six next-generation destroyers using domestically developed technologies.
The envisioned 6,000-ton-class Aegis destroyers are expected to become one of the Navy's core strategic assets, offering capabilities comparable to those of the 7,100-ton King Sejong the Great-class Aegis destroyers, currently the service's most powerful warships.
Thursday's announcement caps a grueling two-year delay for the KDDX project that had been locked in a fierce legal dispute between the two rivals.
The dispute erupted after several HD Hyundai employees were convicted between 2022 and 2023 for stealing Hanwha's initial KDDX conceptual designs.
The breach prompted the Defense Acquisition Program Administration (DAPA), the state arms procurement agency, to change course from the expected private contract with Hanwha to an open competitive bidding process. DAPA imposed a severe penalty on HD Hyundai.
HD Hyundai later filed multiple court injunctions protesting the penalty and seeking to block DAPA from sharing its proprietary data with Hanwha, but the requests were rejected by courts.
Last month, DAPA notified both companies that Hanwha was selected as the final preferred bidder by a narrow margin of 0.59 point.
"We reviewed (HD Hyundai's) objection and concluded that there were no irregularities in the evaluation," a DAPA official said. "We have notified each company of the final decision and plan to proceed with negotiations with the preferred bidder."
DAPA plans to finalize the contract with Hanwha by the end of next month. The lead KDDX vessel is expected to be delivered to the Navy by the end of 2032.
The agency said it will start placing orders for the five other follow-on vessels from the end of 2028, aiming to have them delivered to the Navy by 2036. The successful bidder for the lead vessel usually ends up getting the rest of orders.
"We will continue to work to promote the project in a fair and lawful manner in line with relevant laws and regulations and do our best to make sure that there will be no disruptions to the delivery schedule," the DAPA official said.