Rendering of Korean Next-Generation Destroyer (HD Hyundai)
Rendering of Korean Next-Generation Destroyer (HD Hyundai)

The Korean Next-Generation Destroyer, or KDDX, program, has been pushed back once again, dampening the country’s roadmap to strengthen its naval forces and letting the fight between its top two shipbuilders -- Hanwha Ocean and HD Hyundai Heavy Industries -- intensify.

The KDDX, a 7.8 trillion won ($5.5 billion) project to build six 6,000-ton-class next-generation Aegis-equipped destroyers, was supposed to have a conclusion on who will build these state-of-the-art warships using homegrown technologies by July last year. The KDDX program is crucial for not only strengthening the country’s naval forces but also enhancing its shipbuilding capabilities.

The KDDX program has four steps of concept design, basic design, detail design and building the first ship and building the rest of the ships. Hanwha Ocean won the contract for concept design in 2012 while HD HHI secured the contract for basic design.

Industry experts expected HD HHI to ink the detail design contract to build the first ship but Hanwha Ocean raised the issue of the military secret mishandling of some HD HHI employees and called for a competitive bidding process.

The Defense Acquisition Program Administration has irresponsibly dragged out the selection process instead of taking the helm of the matter. The DAPA handed over the authority to designate defense firms for the KDDX program to the Ministry of Trade, Industry and Energy, which later designated both Hanwha and HD Hyundai as suitors.

In the meantime, Hanwha and HD Hyundai has been going back and forth both publicly and behind the scenes to claim that each of them should be the one to take charge of the KDDX program. The rivalry between the two conglomerates has continued to intensify while the DAPA did not make up its mind. Some even say that one of the reasons Korea came up short in the bidding for the Australian government’s 10-trillion-won project to acquire 11 frigates was the growing feud between Hanwha and HD Hyundai.

To be fair, choosing the right builder for the KDDX is not an easy task but DAPA's hesitation and naive approach have done little to resolve the issue.

As the government is seemingly being careful and thorough in sourcing out the naval empowerment project, it must recognize that the drifting situation could be harming the reputation of the country’s maritime defense industry at a time when the US is seeking Korea’s cooperation in the shipbuilding sector.

About 400 small to medium-sized companies are also involved in the KDDX project as they work with the shipyards of Hanwha and HD Hyundai. The longer the DAPA delays its final say, the more financial difficulties await these local firms, ultimately hurting the country's shipbuilding industry as a whole.

Now that the DAPA has failed to make the decision by the last day of April when it held a meeting of the defense project committee, the fate of the KDDX is likely to be decided after the presidential election on June 3 and the new defense authorities are appointed, meaning that the project is expected to be postponed for over a year. Although it is already late to make the call, the DAPA should recognize that being late is better than being never.


hwkan@heraldcorp.com