Hanwha Ocean selected for South Korea's 7 trillion won KDDX destroyer project

Hanwha Ocean has emerged as the preferred bidder for South Korea's ambitious KDDX project, a multi-billion dollar initiative to develop and construct next-generation destroyers. The Defense Acquisition Program Administration (DAPA) announced the decision, paving the way for negotiations on final contract terms.

The KDDX program, with a total project cost estimated at 7 trillion won (approximately $5.1 billion), aims to build six 7,000-ton destroyers equipped with Aegis combat system capabilities. The Republic of Korea Navy plans to eventually possess 18 such destroyers to enhance its long-range operational capacity.

This massive defense contract became a focal point of intense competition between HD Hyundai and Hanwha Ocean. The bidding process was further complicated by a legal battle concerning leaked confidential data. HD Hyundai Heavy Industries was implicated in illegally obtaining classified information related to Hanwha Ocean's predecessor, Daewoo Shipbuilding & Marine Engineering.

This led to legal repercussions for HD Hyundai employees and penalties for the company. Despite HD Hyundai's initial selection for basic design work, DAPA's subsequent decision to extend the validity of penalty points against the company, based on a second-instance court ruling, ultimately disqualified them from the preferred bidder status. HD Hyundai's disqualification, reportedly by a narrow margin of 0.58 points, has been attributed significantly to these security-related deductions.

HD Hyundai has protested the decision, filing injunctions and lodging appeals with DAPA, but without success. The selection of a preferred bidder, despite the controversies, now shifts the focus to whether the KDDX project will regain momentum. Originally slated to commence in 2024, the project's final decision was delayed by DAPA for two years due to the heated competition. The first KDDX destroyer is scheduled for delivery to the Navy in 2032.