Hanwha Ocean selected as preferred bidder for KDDX program

A rendering of Hanwha Ocean's KDDX destroyer / Courtesy of Hanwha Ocean

Hanwha Ocean has been selected as the preferred bidder for Korea’s long-delayed next-generation destroyer (KDDX) project, a cornerstone of the country’s naval modernization plan, valued at approximately 7.8 trillion won ($5 billion).

The KDDX program plans to deploy six 6,000-ton Aegis-equipped destroyers by 2030, replacing aging vessels scheduled for retirement in the late 2020s.

According to the Defense Acquisition Program Administration (DAPA) and defense industry sources on Thursday, the agency has completed its evaluation of proposals for the detailed design and lead ship construction project and notified both HD Hyundai Heavy Industries (HHI) and Hanwha Ocean of the results in the afternoon of the same day.

“We received an excellent evaluation in the proposal assessment for the detailed design and lead ship construction project of the KDDX, thanks to our advanced naval vessel technology and project execution capabilities," the company said in a press statement following DAPA’s decision.

“As the preferred bidder, we will closely cooperate with DAPA in accordance with project procedures to make up for the delayed schedule and prevent any disruptions to the maintenance of naval power by fully mobilizing our naval ship design and construction capabilities.

“In particular, since KDDX is a 100 percent domestic destroyer equipped with nine core systems of onboard equipment, we will do our best to construct world-class performance and quality through flawless systems integration.”

Since HD Hyundai Heavy Industries completed the basic design in late 2023, the project has seen limited tangible progress over nearly three years, partly due to the rivalry between HD Hyundai and Hanwha, which had been engaged in legal disputes over the alleged involvement of nine HD HHI employees in the theft of naval ship technologies from Daewoo Shipbuilding & Marine Engineering — now Hanwha Ocean — between 2012 and 2015.

Following the finalization of convictions in December 2023, HD HHI received a 1.2-point deduction in government bids through the end of 2026, a penalty that dealt a heavy blow to HD Hyundai given that the final score gap between the two companies was reportedly only 0.5867 points.

Hanwha, which completed the conceptual design, said it will complete and deliver for the KDDX project on schedule.

“As a reliable partner backing the enhancement of the Republic of Korea Navy's capabilities, Hanwha Ocean will pursue the timely deployment of the KDDX. Guided by our patriotism through our businesses, we will also strengthen the K-naval defense ecosystem through win-win cooperation with small and medium-sized partners, while contributing to the revitalization of the country’s economy.”

On the other hand, HD Hyundai issued a statement saying it intends to review the details behind DAPA’s evaluation. It also said it lost to Hanwha even in a category where it had outperformed its rival in terms of technology.

"We regret that we were not selected despite our significant lead in the technical score. We plan to request a debriefing (from DAPA) in the near future to confirm specific details and grounds for the evaluation results,” HD Hyundai said. It added it outpaced Hanwha in the technical category by 0.6425 points.