Germany Sinks Thai-Chinese Submarine Deal
ACCORDING to Thai media reports, Germany will not sell MTU-396 engines to be used aboard the S26T Yuan-class submarine from China Shipbuilding and Offshore International Co(CSOC) purchased for the Royal Thai Navy (RTN). Germany’s defence minister Boris Pistorius was said to have said so to his Thai counterpart Phumtam Wechayachai during a bilateral meeting on the sidelines of the 6th United Nations Peacekeeping Ministerial Meeting in Germany.
Germany again cited the European Union (EU) ban on the export of military equipment to China regarding the engine. Thailand has been waiting on Germany’s answer since reportedly formally requesting for reconsideration on the engine’s export this March. The deal has been in limbo after the Chinese shipbuilders were unable to equip the submarine with a German diesel engine as stipulated in the original contract. Subsequently, the Thai government opted to substitute the deal with a frigate but reverted back to the submarine.
The submarine was supposed to be delivered to the RTN in 2023 but was stopped in its tracks bt the German embargo on the engine. Completion of the submarine reportedly stood at 80% at this time with Thailand already releasing 63% of the payment amounting to US$227m as of March 2025. Moreover, the RTN had already spent over US$29m to build infrastructure and facilities to accommodate the submarine, including docks, maintenance shipyards, torpedo warehouses and command and communication stations. Should the submarine deal fall through, RTN officials said that many of the new facilities could be used for frigates and corvettes instead. Cancellation of the deal would cost Thailand as much as US$240 million, an undesirable outcome for Bangkok.
China and Thailand had previously agreed to install a CHD620 electric generator onboard in place of the German MTU396 engine. The CHD620 however is reportedly not meant to serve as an engine, merely as a submarine electric generator. The Chinese side is also said to have offered the RTN a submarine training simulator along with some spare parts for compensation.
During the meeting, Wechayachai also talked on the prospects of including the kingdom in Germany’s defence industry supply chain and invited Germany’s participation in the upcoming Defense & Security 2025 exhibition in Bangkok this November. The RTN was also reported to be interested in acquiring as many as two frigates per year for the fiscal years of 2026 and 2027 to make a total of four. With a fleet of four frigates at this time, the RTN is expecting a need for eight frigates to maintain its presence in the Gulf of Thailand and Andaman Sea.