Thai Navy’s Warship Projects Stalled Amid Political Uncertainty
The Royal Thai Navy’s plans to procure submarines and frigates remain in limbo due to the current administration’s reluctance to move forward with the projects. With Prime Minister Paetongtarn Shinawatra facing a censure debate in late March, any decision on these defense acquisitions appears increasingly unlikely.
The Navy had agreed in mid-2023 to accept China’s offer of an S26T Yuan-class submarine equipped with a Chinese CHD 620 engine, along with a compensation package worth 200 million baht for previous financial losses and delays. This offer followed discussions between Thai defense officials and Beijing in May 2023, during the tenure of then-Prime Minister Srettha Thavisin and Defense Minister Sutin Klungsang.
However, despite the agreement, the Defense Ministry has yet to advance the proposal to the Cabinet. Instead, it has instructed the Navy to seek input from seven government agencies, including the Foreign Ministry, Finance Ministry, and the Council of State, prolonging the decision-making process.
Unresolved Submarine Contract
A senior naval official, speaking on condition of anonymity, expressed frustration over the ongoing delay. “We have complied with all requirements and have been waiting for nearly a year. No one can explain what is holding up the decision,” the official said.
The Navy had originally signed a 13.9-billion-baht contract with China Shipbuilding & Offshore International Co., Ltd. (CSOC) in May 2017 for the submarine’s procurement. To date, construction of the vessel is about 64% complete, and Thailand has already disbursed 7.7 billion baht—approximately 63% of the total cost.
Delivery was initially scheduled for 2023 but was postponed after the German-manufactured MTU 396 engine, stipulated in the contract, became unavailable due to an embargo imposed following the 1989 Tiananmen Square crackdown. The Navy had accepted this situation as a ‘force majeure,’ preventing the contract’s termination.
To compensate for the engine issue, China proposed revised terms, including free training simulators, a 125-million-baht discount, and an extension of the engine warranty from two to eight years. The agreement requires Cabinet approval and an amendment to the 2017 contract, extending the submarine’s delivery deadline by 1,270 days, which would push completion to late 2028 if approved immediately.
Criticism Over Compensation
Opposition MP Wiroj Lakkhanaadisorn, chairman of the House Military Affairs Committee, criticized the deal, arguing that the 200-million-baht compensation was insufficient given Thailand’s financial losses and delays. He suggested the Navy should demand at least one billion baht in compensation.
Wiroj and the committee visited the Sattahip Navy base on February 24, where they met with senior naval officials, including Admiral Nattaphon Diaowanik, commander of the Royal Thai Fleet. The Navy showcased infrastructure already developed for the submarine project, including maintenance docks, torpedo warehouses, and command stations, which have cost over a billion baht. Some facilities, such as the weapons storage and testing buildings, are completed, while dock construction was halted during the COVID-19 pandemic.
Officials noted that if the submarine deal falls through, these facilities could still be repurposed for other naval vessels, such as frigates or corvettes.
Plans for New Frigates
For the 2026 fiscal year, the Navy is proposing a 35-billion-baht budget to build two 4,000-ton frigates over five years, with at least one to be constructed domestically under the offset policy, which aims to promote local industry and job creation.
The new frigates would be the most technologically advanced in the Thai fleet, featuring stealth capabilities, anti-drone systems, and three-dimensional radar. If approved, this would mark the first time a frigate is built in Thailand, with Thai shipbuilders leading the construction process.
Opposition members have indicated they would not challenge the frigate proposal if Thai firms handle the assembly and production. The Industry for National Defense and Security Association and the Thailand Shipbuilding and Repair Association (TSBA) have both expressed support for the project, citing its potential to boost the local economy.
Impact on Domestic Shipbuilding
If the project proceeds, at least 30% of the frigate’s components and materials would be sourced locally. Shipyards awarded the contracts are expected to sustain employment for engineers, technicians, and specialists, potentially revitalizing Thailand’s struggling shipbuilding industry, which has seen multiple closures in recent years.
According to a Navy official, consultations have been held with 11 domestic shipbuilders, six of which have submitted concrete proposals. However, despite the potential economic benefits, the Navy faces a financial challenge if it intends to proceed with both the submarine and frigate projects simultaneously.
Discussions with the Budget Bureau suggest that if the Navy continues with the submarine procurement, funding may be available for only one frigate. Some analysts warn that constructing just one vessel may not be viable for the domestic shipbuilding sector.
While the projects remain stalled, the Navy awaits political clarity on its future defense procurement strategy. The government’s final decision will determine whether Thailand prioritizes submarines, frigates, or a compromise between the two, amid economic and budgetary constraints.
