After years of tap-dancing around the submarine procurement controversy, the government has finally admitted that it may have to take the submarines it ordered from China despite disagreements over engine options, or risk losing the money it handed over as a down payment for the deal.
"We are now limited to two options. Either we take the submarines, or lose the 80% [of the budget] we had put down in advance for the project," Deputy Prime Minister Phumtham Wechayachai, in his capacity as defence minister, told the press yesterday.
This wasn't the stance that the Pheu Thai Party took when it was in the opposition just a few years ago. Back then, the party's bigwigs, including Mr Phumtham, not only lambasted the procurement project -- they vowed to sink the subs deal that was inked in 2017 by then-Defence Minister Prawit Wongsuwon with China under a government-to-government deal.
To give credit where it's due, Mr Phumtham actually did try to convince Berlin to allow the Royal Thai Navy to fit the three S26T Yuan-class subs it had ordered from the China Shipbuilding & Offshore International Co (CSOC) with German-made MTU396 engines.
However, in a letter sent to the government last week, Berlin decided to uphold its decision to bar the navy from fitting the subs with German engines, saying it had to abide by the European Union's restrictions on the sales of strategic equipment to China, which it has to comply as a member of the EU and Nato.
This presents the government with a big problem. The navy will now have to consider the engine options proposed by the CSOC, which has never produced an engine that meets the performance requirements outlined by the navy.
It must be noted that this isn't just a contract issue; it is also a safety concern. The navy insisted on using the MTU396s, because not only have the engines been proven to be able to meet the performance and reliability requirements, but they are also widely used by other navies to power their submarines.
For several years, the shipbuilder has lobbied the government to accept the engine options it offered. Last year, the RTN seemed to soften its position, saying it would consider the engine proposed by CSOC. The question is: Has the original contract been amended?
The navy must make safety a priority. It must be remembered that the RTN has limited submarine technology knowledge. The only other country that has agreed to use the option offered by CSOC is Pakistan, which started using the Chinese engines a few years ago.
The problem with this submarine procurement project goes far beyond contractual violations.
The RTN has continuously invested money in this submarine project. Besides the billions of baht it put down as an advance payment, the navy has also forked out three billion baht to build a dock to accommodate the Yuan-class submarines, and commissioned the CSOC to build another ship that will be deployed alongside the submarines. It wouldn't be a surprise if the RTN chose to buy more submarines from the same supplier, even if it cancelled the current deal for contractual violations.
The recent development is bad news for those who want to see more transparency in arms procurement. Lawmakers need to look into the contract and clear any doubts about the engine offered by CSOC. Mr Phumtham and the government must show that they are committed to ensuring public safety as their first and foremost priority.