The Royal Thai Navy (RTN) is pressing ahead with its plan to procure a 13.5-billion-baht submarine from China after the two sides reached an agreement on the matter earlier this week, according to a navy source.
Gen Somsak Rungsita, an adviser to Defence Minister Sutin Klungsang and chairman of a Defence Ministry panel tasked with addressing the submarine issue, held talks with a Chinese delegation led by Col Shi Xionning, a deputy director of China's Bureau of Military Equipment and Technical Cooperation (BOMETEC), on Tuesday.
The following day, the Chinese delegation met Mr Sutin for talks on the matter, the source said.
The source said both sides agreed to go ahead with the construction of an S26T Yuan-class submarine under a government-to-government procurement deal.
"The problem has been solved because of good relations between the two countries," the source said.
The two sides agreed the submarine would be installed with a CHD620 electric generator as a replacement for the German MTU396 engine.
"The CHD620 is, in fact, a submarine electric generator. It is not meant to serve as an engine," according to the source.
The navy previously sent a working panel to observe the testing of the CHD620 generator in China.
Despite the CHD620 having never been used before, the Chinese Defence Ministry has issued an industrial certificate for it. It has also received a certificate of approval from Lloyd's Register, a London-based international marine shipping classification society, the source said.
Pakistan, which had a similar problem, also allowed China to replace a German-made engine with the CHD620 in a submarine Pakistan bought from China, the source said.
The next step will be for the Defence Ministry to ask the cabinet this month to extend the contract duration by another 1,217 days to take possession of the sub after the original deadline ended on Dec 30 last year, the source said.
The navy has also asked the Council of State -- the government's legal arm -- for an interpretation on an amendment of the contract so as to shift from the German-made engine to the Chinese-made electric generator, the source said.
The navy is confident it has the authority to amend the contract, the source said.
The source went on to say that there was a delay in solving the problem because China was busy carrying out a merger of agencies responsible for selling weapons to foreign countries. Those agencies were later merged into BOMETEC, the source said.
Instead of paying 200 million baht in compensation for the delayed construction of the submarine, China will offer the navy a submarine training simulator and some spare parts for the sub, which are also worth about 200 million baht, the source said.
China Shipbuilding & Offshore International Co (CSOC) was contracted to build the submarine for 13.5 billion baht under a G2G deal with Thailand. Construction was reportedly halfway finished but was delayed due to the pandemic and was on hold due to the engine issue.
The original deal signed in May 2017 stipulated a German-made diesel engine. But the plan changed after Germany refused to sell the engine to China as it is designated a military/defence item.
The restriction followed the EU's instruction to impose an arms embargo on China in 1989. Beijing proposed a Chinese-made engine instead.