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Should the Liberal government decide to go with the ThyssenKrupp Marine Systems (TKMS) bid, the German shipbuilder has now pledged to deliver four Type 212-CD submarines to the Canadian Navy by 2036, the country’s defence minister tells CBC News.
Boris Pistorius said Wednesday that he has every confidence that the company will meet the delivery goal, which emerged early on as one of the major competitive differences between TKMS and South Korea’s Hanwha Ocean shipyard.
“They say we are able to do so. That’s deliverable of the proposal, of the offer,” Pistorius said in an exclusive interview on the margins of the Ottawa arms expo CANSEC, put on by the Canadian Association of Defence and Security Industries.
“They say they can do that, and I trust them because I have only good experiences with them. They only promise what they can really achieve.”
Under pressure to beat South Korea’s bid, Germany is committing to provide four completed vessels by 2036, along with infrastructure and military investments worth tens of billions of dollars, CBC News has learned.
Concerns around delivery timeline
Almost from the outset of the competition last year, Hanwha said it could deliver four of its KSS-III submarines to Canada by 2035. The date is important because the Canadian navy plans to retire all of its current Victoria-Class submarines by then. As it stands, only one-of-four existing boats is operational and the navy urgently requires replacement.
TKMS had been fuzzy on how it could match the timeline. But Pistorius acknowledged that both Germany and Norway — also a partner in the program — have offered to give up one boat each from existing orders for their own navies in order to help meet the Canadian demand. The shipbuilder would also then prioritize the next two boats for Canada.
Pistorius said both Germany and Norway would make up the loss later in the production schedule, and in his view, it’s important for allied solidarity.
“We are absolutely convinced that it is in our joint interest in NATO and between Europe and Canada to strengthen all the capabilities of our Canadian allies,” Pistorius said.
“It is about reliability among partners and allies. It’s about a joint and mutual perspective on the threats we all have to face together. And this is about focusing on the areas in which the threat is the most relevant and present. And this, of course, for example, the High North, the Arctic, the North Atlantic.”
German Minister of Defence Boris Pistorius tells CBC News that he trusts German submarine builder TKMS to deliver if Canada decides to purchase its boats. ‘We are talking about NATO requirements, NATO capabilities, so there is nothing to lose,’ he said.
German pitch includes range of investments
This week, CBC News had a chance to examine a summary of specific information related to the German submarine pitch.
The government in Berlin is looking at a wide range of investments in the Canadian economy — both military projects associated with the submarines and projects outside of defence.
For example, the Germans are proposing a partnership with Alberta for a carbon capture facility using TKMS technology. It’s also willing to invest in turning the Port of Churchill in Manitoba into a major export hub — especially for liquified natural gas (LNG).
On the defence side, TKMS is planning to build submarine maintenance facilities on both coasts. But separately, there are proposals to build a factory to make heavy torpedoes and develop hypersonic missiles.
All of this adds up to billions of dollars of investment and possibly tens of thousands of jobs over the decades.
South Korea has made similar promises if it gets the contract.
What makes this German bid different is that most of the projects it is proposing are front-loaded and can be up and running in two years.
Hanwha Ocean and South Korea have been slick in their promotion of their bid, with a high profile campaign that included a visit by brand new KSS-III submarine to Victoria last weekend.
A brand new Korean submarine, the Dosan Awn-Chung-Ho, arrived at CFB Esquimalt as part of a bid for a Canadian military contract for 12 new submarines. The main competitor is a German/Norwegian supplier.
Pistorius rejected any suggestion that the Germans and Norwegians have been playing catch-up in terms of perception in Canada.
“It is not about how much we do in public promotion,” the minister said. “It’s not about being there or being here. It’s about making clear we are talking about and discussing a very, very important deal between Canada and TKMS in Germany….
“It’s so crucial, and it’s a strategic relevance for NATO as a whole.”
Decision about more than military: Carney
Prime Minister Mark Carney and Defence Procurement Minister Stephen Fuhr say both the German and South Korean submarines meet the navy’s requirements, and a decision on which bid to follow will be made within a month.
Carney, speaking to reporters on Wednesday, said the decision is bigger than just the military requirements.
“Certainly the economic implication, the broader economic benefits” are one factor, the prime minister said.
Canada is also looking for “a partnership that extends more broadly and strategically,” Carney said.
Defence analyst Dave Perry, president of the Canadian Global Affairs Institute, says it’s going to be a tough choice because both the German-Norwegian bid and the South Korean pitch bring a lot to the table.
He says they’ve clearly had a different approach in terms of how public and communicative they’ve been about their bids.
“I think we’ve sort of seen some evidence the [Canadian] government has been really fairly clever and tried to create a highly competitive, really good offer for Canada,” Perry said.