There are concerns that the $8 trillion project for the introduction of the Korea-style next-generation destroyer (KDDX) may be delayed following the early presidential election in June. The Defense Acquisition Program Administration (DAPA) stated it intends to raise the agenda at the project committee within this month to resume discussions, but it has been unable to set a specific schedule as HD Hyundai Heavy Industries and Hanwha Ocean, which are competing for the contract, have not narrowed their differences over the selection method for the contractor. Some in the defense industry have mentioned the possibility that the selection of the contractor may be passed to the next government.
On the 8th, DAPA spokesperson Jo Yong-jin said at a regular briefing, "We are continuing discussions with both companies (HD Hyundai Heavy Industries and Hanwha Ocean) aiming to present the agenda to the committee by April, but the schedule for the Defense Acquisition Promotion Committee has not been finalized." The KDDX project proceeds with DAPA's committee selecting the corporation responsible for detailed design and the construction of the lead ship (first ship) through deliberation, followed by a final decision from the promotion committee.
KDDX is a project to build six domestically produced Aegis destroyers of 6,000 tons for a cost of 7.8 trillion won by 2030. Hanwha Ocean is in charge of conceptual design, while HD Hyundai Heavy Industries has completed the basic design as of December 2023. The selection of contractor has been delayed for more than a year as both companies clash over the method for detailed design and construction of the lead ship (first ship). HD Hyundai Heavy Industries holds the position that it should proceed with a private contract since the company that conducted the basic design should undertake the detailed design, but Hanwha Ocean argues that a competitive bid should be conducted due to HD Hyundai Heavy Industries' felony conviction for stealing military secrets.
At the committee meeting held on the 17th of last month, DAPA discussed the KDDX agenda but failed to reach a conclusion on the private contract, competitive bidding, or joint development between the two companies. It is known that external commissioners within the committee opposed the policy for private contracts. They attempted to discuss the agenda again on the 27th, but were unable to raise it due to disagreements among commissioners.
Earlier this month, DAPA summoned HD Hyundai Heavy Industries and Hanwha Ocean to order them to reach an agreement on the method of the project, but neither company made progress as both maintained their original positions. Subsequently, on the 4th, the Constitutional Court cited the impeachment of the president, confirming that a presidential election will take place within 60 days. There are observations in the defense industry that it is burdensome for DAPA to proceed with contractor selection in the early election phase. Moreover, within DAPA, opinions have surfaced stating that pushing forward despite opposition from companies and resistance from commissioners just a month ahead of the election would be unreasonable.
A DAPA official stated regarding the decision on the KDDX project method, "We have no intention of postponing it until after the election, and we are discussing with HD Hyundai Heavy Industries and Hanwha Ocean through various channels to present the committee agenda by April."