Seoul to export 4 naval tankers to UK

By Lee Tae-hoon

Britain awarded Daewoo Shipbuilding and Marine Engineering (DSME) a contract to build four 37,000-ton tankers worth $709 million for the Royal Navy, sources said Thursday.

Government and industry officials confirmed that the British military picked DSME for its Military Afloat Reach and Sustainability (MARS) tanker project.

They said DSME, a leading shipbuilder in Korea, is expected to sign a final contract in mid-March.

“After running an international competition the Ministry of Defense has selected Daewoo Shipbuilding and Marine Engineering as the preferred bidder,” said Lord Astor of Hever, the U.K. under-secretary of state for defense.

He said a number of British companies took part in the tender, but none submitted a final bid for the contract.

“The building contract has been awarded to DSME whose bid demonstrated the best value for money,”Astor said.

Hyundai Heavy Industries, another major Korean shipbuilder, and Fincantieri of Italy made the shortlist for Britain’s next generation support tanker program, but failed to win.

Once the deal, the third largest arms export contract for Korea, is finalized, DSME will supply four MARS tankers by 2016 to replace aging single hulled tankers of the British Royal Navy that date back to the 1970s.

Astor assured that the decision to award the tanker contract to DSME will not deal a severe blow the British shipbuilding industry as the Korean company promised an extensive industry partnership with British firms.

“I would also like to challenge any suggestion that this contract signals a change in our commitment to the U.K. shipbuilding industry,” he said.

He noted that U.K. work content of the contract is estimated to be up to 20 percent, or about $141 million, for the provision of key systems and equipment and further opportunities await British firms in the customization of the tankers.

DSME’s MARS ships are more than 200 meters in length and capable of simultaneously refueling an aircraft carrier and destroyer while conducting helicopter resupply operations. The tankers can pump enough fuel to fill two Olympic-size swimming pools in an hour and be used for the supply of munitions and food to other warships.

Officials of DSME, however, declined to comment on details of the contract, saying the company will need further negotiations with the British government before inking the final deal.