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Controversy stirs over bidding process in Navy's destroyer project

All News 08:21 October 03, 2020

By Nam Kwang-sik

SEOUL, Oct. 3 (Yonhap) -- Controversy has been heating up over the South Korean Navy's next-generation destroyers as a series of legal issues in the bidding process continued to pop up, industry sources said Saturday.

In mid-July, Hyundai Heavy Industries Co. and Daewoo Shipbuilding & Marine Engineering Co. submitted their bids for the design of the 6,000-ton class destroyers, called the Korea Destroyer Next Generation (KDDX).

Before the announcement of the prime bidder for the project in October, the country's arms procurement agency Defense Acquisition Program Administration (DAPA) informed the two shipbuilders of its evaluation of their proposals.

Hyundai Heavy beat Daewoo Shipbuilding by a margin of 0.056 point.

Earlier in September, Daewoo Shipbuilding lodged an appeal against DAPA over its evaluation, while asking for a court injunction seeking to stop the selection of the prime bidder for the project.

The project again faced an unexpected development on local reports that a Hyundai Heavy Industries official allegedly stole a conceptual design for the KDDX drawn by Daewoo Shipbuilding in 2014 with the help of Navy officers and then used it to draw the basic design for the destroyer.

This photo, provided by Hyundai Heavy Industries Co., shows the South Korean Navy's first aegis destroyer King Sejong the Great, built by the shipbuilder. (PHOTO NOT FOR SALE) (Yonhap)

The case came to the fore this month, though the probe into the case started two years ago.

The military authorities have been looking into the case since 2018, and around a dozen Hyundai Heavy officials are also under investigation by the civilian prosecution.

In connection with the reports, Daewoo Shipbuilding showed no reaction.

"The reports have nothing to do with Daewoo Shipbuilding," Yoon Yohan, a spokesman at Daewoo Shipbuilding, told Yonhap News Agency.

But residents of the southeastern city of Geoje, where Daewoo Shipbuilding is based, have called on DAPA to reevaluate the proposals from Hyundai Heavy and Daewoo Shipbuilding, denouncing Hyundai Heavy's alleged illegal acts.

On Sept. 27, Byun Gwang-yong, the mayor of Geoje, said the KDDX project should be reviewed during the parliamentary inspection of government offices to be held next month.

As a prolonged slump paints a gloomy outlook for the shipbuilding industry, residents of Geoje became more concerned about whether Daewoo Shipbuilding will win the order for the project.

Despite growing controversy, DAPA recently said the project has been going on in accordance with due procedures and regulations.

The 21 billion won (US$17.6 million) project will be finished in 36 months after the selection of a prime bidder, the arms procurement agency said.

The basic design of the destroyer includes procedures to determine the size, performance, weapon system and equipment deployment of the destroyer.

After the completion of the basic design, DAPA will invite bids for the detailed design of the destroyer slated to be launched in 2024, according to the agency.


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