[E-Daily Reporter kim kwanyong ] South Korea, which had thrown its full weight behind the bid for Canada’s Next-Generation Submarine Program (CPSP), suffered a setback after being outbid by Germany. The Defense Acquisition Program Administration (DAPA) assessed that while South Korea was sufficiently competitive in terms of the submarines’ performance, delivery schedule, and industrial cooperation conditions, it ultimately failed to overcome the “invisible barrier” of interoperability and strategic cooperation among North Atlantic Treaty Organization (NATO) allies.

Lee Yong-chul, head of the Defense Acquisition Program Administration (DAPA), held a briefing at the Ministry of National Defense press room in Yongsan, Seoul, on the 7th. “As the official in charge of this matter, I am deeply sorry that we were unable to achieve the results we had hoped for in the Canadian submarine project,” he said. “The fact that we failed to secure the contract despite the public’s keen interest and the full-scale support of the entire government—including the Ministry of Trade, Industry and Energy, the Ministry of National Defense, the Ministry of Foreign Affairs, and the Navy—is entirely due to my own shortcomings.”

Earlier, on the 6th (local time), the Canadian government selected Germany’s ThyssenKrupp Marine Systems (TKMS) as the preferred bidder for the Canadian Next-Generation Submarine Program (CPSP), a project valued at approximately 60 trillion won. However, it retained South Korea as the second-ranked bidder so that negotiations could begin with Hanwha Ocean should the final contract negotiations with TKMS break down.

The DAPA did not attribute this loss to a lack of technological competitiveness. Director Lee explained that the Canadian government cited the following reasons for selecting TKMS: △ the performance of the fuel cell-based Air-Independent Propulsion (AIP) system and lithium-ion batteries; △ a track record of supplying submarines to multiple NATO member states; △ interoperability that enables the sharing of training, maintenance, parts, and crew among allied nations; △ early delivery utilizing production slots in Norway △ industrial cooperation and contributions to the local economy.

However, he emphasized, “I don’t think there was a significant difference between us and them in terms of submarine performance—such as batteries—industrial cooperation, MRO, or early delivery,” adding, “In particular, our delivery schedule was more than a year faster.” He stated, “Ultimately, I believe the decisive difference stemmed from NATO interoperability—which even allows for the sharing of crew members—and future cooperation.”

An official from the Defense Acquisition Agency also analyzed, “It appears Canada was weighing a strategic choice between strengthening its existing Atlantic strategic alliance and expanding its Indo-Pacific partnership, represented by South Korea,” adding, “Ultimately, they chose to strengthen the existing alliance built over 70 years.”

Canada’s Arctic security strategy was also a key factor, according to analysts. An official from the Defense Acquisition Program Administration explained, “Canada is a country that must shoulder responsibility for both the Atlantic and the Pacific, and it has a particularly strong interest in Arctic security,” adding, “While the Arctic is merely a concept—such as the Northern Sea Route—for us, it is a tangible security space for Canada.”

The official continued, “Germany is located within the European security sphere adjacent to the Arctic, but we are not,” adding, “While Germany can engage in industrial cooperation—such as participating in Arctic modernization projects—we faced structural challenges in this regard.”

However, the Defense Acquisition Agency drew a clear line, stating that the assessment that South Korean submarines are technically inferior in extreme cold environments is not true. An official stated, “Although we have not conducted actual Arctic trials, we are performing tests in extreme environments of that level,” adding, “We do not consider this a technical disadvantage.”

Regarding interoperability, while the nature of submarines means they do not frequently communicate during actual operations, analysts believe that operational efficiency—achieved by sharing existing maintenance systems, parts supply chains, and training systems—influenced Canada’s decision.

DAPA stated that the Canadian side had engaged in prior communication with due diplomatic courtesy prior to this announcement. A DAPA official said, “Canadian Prime Minister Mark Carney personally mentioned during the announcement that he had sought prior approval from President Lee Jae-myung,” adding, “We understand that communication was conducted with due respect between the two nations.”

Prime Minister Carney also remarked at the time of the announcement, “I had a long and cordial conversation with President Lee Jae-myung last weekend, during which we discussed this matter as well,” adding, “South Korea is an important strategic partner for Canada.”

The Defense Acquisition Program Administration (DAPA) assessed that this mission was not an outright failure. Director Lee emphasized, “It served as an opportunity to showcase our submarine technology and industrial competitiveness to the global market.”

He cited the example of the Norwegian tank project—where South Korea failed to secure the contract but Poland, having witnessed the K2 tank’s performance in extreme cold, later signed a large-scale contract—and stated, “This, too, could be an opportunity for another leap forward.”

An official from the Defense Acquisition Program Administration (DAPA) also explained, “This project served as a ‘showcase’ for our submarines,” adding, “The Dosan Ahn Chang-ho-class submarine actually crossed the Pacific Ocean, sailing 14,000 km, and Canadian Navy crew members who boarded the vessel directly gave high marks for its habitability and operability.”

Building on this experience, the Defense Acquisition Program Administration (DAPA) also outlined the direction of its defense export strategy. Director Lee emphasized, “Block formation centered on security alliances and the prioritization of domestic weapons have now become constants in the defense market,” adding, “To overcome this, we must secure a technological lead large enough to transcend these blocs and find opportunities to enter the mainstream market through groundbreaking localization.”

He went on to say, “We will actively support research and development aimed at establishing a technological lead and will also strive to develop defense AI and physical AI-based weapon systems in line with the national initiative of the AI transformation.”