A preferred bidder for the Canadian navy’s next-submarine programme, the Canadian Patrol Submarine Project (CPSP), will be announced on the morning of July 7 Korea time. The decision will determine the outcome of an order fight worth 60 trillion won between a South Korean team of Hanwha Ocean and HD Hyundai Heavy Industries and Germany’s Thyssenkrupp Marine Systems (TKMS).

The Globe and Mail, a Canadian daily, reported on July 5, citing multiple government sources, that Prime Minister Mark Carney will officially announce the CPSP contract result on July 6 local time in Halifax, Nova Scotia. The prime minister’s office said it would announce “new measures to make Canada safer and more prosperous.” Halifax is a port city in eastern Canada that has a large naval base.

The CPSP is a project to build up to 12 diesel submarines to replace four Victoria-class submarines that retire in the mid-2030s. The Canadian navy aims to secure a long-range undersea capability spanning the Atlantic, Pacific and Arctic oceans. Construction costs alone are estimated at around 20 trillion won, and the total project could reach up to 60 trillion won when adding 30 years of maintenance, repair and operations (MRO) costs after introduction.

South Korea proposed the 3,600-ton diesel-electric Jangbogo-III Batch-II submarine, while Germany proposed the 2,800-ton Type 212CD. The first Jangbogo-III Batch-II boat, Jang Yeong-sil, was launched last year and is the latest model to be delivered to the South Korean navy by the end of next year. Hanwha Ocean highlighted fast delivery, offering to hand over 4 boats by 2035 to prevent a gap in Canada’s submarine capability. Germany, meanwhile, stresses interoperability with NATO allies.

If South Korea is selected, it would be the first case of Canada introducing a major weapon system from a non-Western supplier. Earlier, Kang Hoon-sik (강훈식), the presidential chief of staff, referred to the project as “about a 50-50 situation.”

Locally, the possibility of splitting the contract has also been raised. The Toronto Sun reported, citing a senior Canadian navy official, that the navy is open to a mixed fleet operating different models together. An analysis said that if South Korea and Germany split construction with 6 boats each, Canada could maintain cooperation with NATO allies while also strengthening strategic ties with the Indo-Pacific region. Operating both models at the same time, however, increases costs for training and maintenance, as well as for procuring parts.