China Offers Indonesia Submarine Being Built for Thailand

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China is reportedly offering to sell Indonesia a half-built Yuan-class submarine originally ordered by Thailand, with the flexibility to include a German-made engine if desired by Jakarta.

This development was reported by Janes on Wednesday. There is no official confirmation from Indonesia.

The proposal comes despite Thailand's ongoing claims that its deal to acquire the Chinese submarine is progressing. In May, Thailand's Defence Minister Sutin Klungsang stated that negotiations would take another one or two months to conclude.

On June 28, officials from China State Shipbuilding Corporation (CSSC) visited the Indonesian Ministry of Defence in Jakarta and presented how the S26T diesel-electric submarine could be customized to meet the Indonesian navy’s requirements, according to Janes.

CSSC officials assured the Indonesian ministry that their offer would not encounter the same export restrictions experienced by the Royal Thai Navy. The original contract with Thailand, signed in May 2017, specified a German-made diesel engine. However, Germany refused to sell the engine to China, citing it as a military/defense item under a European Union embargo.

Beijing has been attempting to persuade Thailand to accept a Chinese-built generator instead of the German engine, without incurring a breach of contract penalty. During the Jakarta meeting, the Chinese delegation stated that Indonesia could choose an engine from any vendor, including the Germany-based MTU, Janes reported.

In November 2023, Thai Navy’s chief Adm Adung Phan-iam said that the offered Chinese engine, CHD620 is actually a licensed-manufactured version of the German MTU396 engine.

The offer to Indonesia also includes a modification package that would enable the S26T to deploy and launch Chinese-made YJ-18 torpedo tube-launched anti-ship cruise missiles.

Indonesia's PT Pal and the Naval Group have commenced steps to start producing the Scorpene Evolve submarine in Indonesia. It remains to be seen how the Chinese submarine will fit into the Indonesian Navy's requirement

China Shipbuilding & Offshore International Co (CSOC) was originally contracted in 2017 to build the submarine for 13.5 billion baht ($366.5 million) under a government-to-government deal with Thailand. Construction was reportedly half-finished when it was delayed due to the Covid-19 pandemic and subsequently put on hold because of the engine issue.

Derived from the People's Liberation Army Navy's (PLAN) Type 039B Yuan-class submarine, the S26T is anticipated to have a displacement of approximately 2,600 tons, boasting a maximum speed of 18 knots and a submerged endurance lasting up to 20 days. Its weaponry includes a capacity for up to 16 torpedoes and as many as 30 mines.