Government officials have warned that a massive government-to-government submarine procurement deal could be scrapped if China is unable to fit the engines specified in the purchase agreement.
The officials were responding to questions from reporters after it was reported that a German company had refused to supply MTU396 diesel engines to China for use in the S26T Yuan-class submarine being built for the Royal Thai Navy.
Prime Minister Gen Prayut Chan-o-cha said he had instructed the navy to do everything possible to complete the deal, but acknowledged that the contract would be terminated if China failed to meet the terms of the agreement.
The premier insisted, however, that any cancellation would have no impact on Thai-Chinese relations and that both sides were working closely to resolve the issue.
Adm Somprasong Nilsamai, commander of the Royal Thai Navy, said on Saturday (2 Apr) that no changes had been made to the deal and that China would have to follow the contract as originally agreed.
The submarine’s engines were to be supplied by Germany’s MTU under the terms of the agreement, but the company was unable to sell them due to an embargo because they are classified as military/defense items.
Navy spokesman Vice Adm Pokkrong Monthatphalin said the Navy will hold talks with China Shipbuilding & Offshore International Co (CSOC) this month to resolve the issue.
CSOC had reportedly requested that the terms of the contract be changed to allow for Chinese engines of comparable quality, such as the MWM 620, but the navy says it is sticking to the original contract. (NNT)