China accepts offer to swap sub for ships

China has agreed in principle to supply the Royal Thai Navy with either two offshore patrol vessels (OPVs) or a frigate instead of a submarine powered by a Chinese-made engine, according to a navy source.

The agreement was made during a recent visit by Defence Minister Sutin Klungsang to China, the source said yesterday.

The minister’s delegation included navy commander-in-chief Adm Adung Phaniam and Deputy Foreign Minister Jakkapong Sangmanee. The trip was concluded on Wednesday.

China has accepted Thailand’s proposal to purchase either two offshore patrol vessels or one frigate, as opposed to a submarine, the source said.

Payment for this arrangement would be made using the navy’s instalments for the submarine over the past six years, totalling 8 billion baht. However, details have yet to be finalised.

The change has raised concern about China Shipbuilding & Offshore International Co (CSOC), which was contracted to build the submarine under a government-to-government (G2G) agreement. The sub is reportedly 50% built.

After Mr Sutin, who represents the ruling Pheu Thai Party, became the defence minister last September, he announced the following month that he would shelve the navy’s submarine procurement plan with China and push for procuring a frigate from China. This decision stemmed from China’s inability to install a German engine in the ordered submarine.

The original agreement, signed in 2017 for the S26T Yuan-class submarine, stipulated a German-made diesel engine.

However, Germany forbids the use of such engines in Chinese military and defence hardware. Consequently, Beijing proposed a Chinese-made engine as an alternative.

Thailand planned to purchase two submarines from China for a total budget of 22 billion baht.