The Defence Ministry expects to have a solution for its submarine procurement predicament within the next two weeks and is likely to accept the Chinese engine, said a navy source.
The matter is being reviewed by a panel on the navy's purchase of a Chinese submarine to seek the cabinet's approval on whether it will extend the contract for another 1,217 days in response to a letter sent by the Office of the Attorney-General.
Defence Minister Sutin Klungsang said the panel is looking into the details to make the decision.
The procurement plan is being reviewed based on three issues: the need for a submarine by the navy, the benefits it would bring to the country and bilateral relations.
The plan is a legacy of the former administration of Gen Prayut Chan-o-cha, who, from 2014, doubled up as prime minister and defence minister. The original contract stipulates that the partially built Chinese Yuan-class S26T submarine must use a German-built MTU 396 engine. However, Germany has refused to sell the engines to China as they are designated as a military/defence item.
The restriction followed the European Union's instruction to impose an arms embargo on China in 1989.
The China Shipbuilding & Offshore International Co (CSOC), which is contracted to build the submarine under a government-to-government agreement, then offered the Chinese-built CHD620 engine.
But the Chinese navy must certify the CHD620 engine with the Thai navy and assure its safety and compensate for any delays, said the navy source.