The navy has "some other options" prepared should its 13.5-billion-baht deal to buy a submarine from the China Shipbuilding and Offshore International Company (CSOC) fall through due to the company's failure to procure the German-made MTU 396 engine for the project.
Navy chief of staff Adm Tharoengsak Sirisawat revealed on Friday that further discussions will be held with CSOC towards the end of this month to see if the company can resolve the issue.
"The navy will consider any proposals first, but we also already have in mind some other options," Adm Tharoengsak said.
Previously, Prime Minister Prayut Chan-o-cha, also defence minister, said he had instructed the navy to do its best to get the deal over the line, but if China could not fulfil the agreement, the contract would have to be scrapped.
He was answering reporters' questions following reports that a German company had refused to supply MTU396 diesel engines to China to be fitted into the S26T Yuan-class submarine being built for the navy.
Navy commander Adm Somprasong Nilsamai, meanwhile, said yesterday the navy and the Chinese contractor will work to overcome the problem.
However, when asked to clarify as to whether that will mean the navy will agree if CSOC proposes using a submarine engine supplied by a different company, the navy chief declined to comment.
And when asked whether the navy is prepared to pull the plug on the whole deal should the agreed engine fail to materialise, he said no new decisions will be made until after the negotiations.
The navy chief then simply nodded before leaving in a waiting car when asked whether there was likely to be a decision made by the end of this month.
A source said previously that the CSOC had asked to alter the contract in order to substitute the German engines with Chinese equivalents such as the MWM 620, but, so far, the navy had stood by the terms of the original contract and refused to look at alternatives, although its hand may now have been forced.
According to the source, MTU 396 diesel engines can also be made in China by a licensed manufacturer.