Hanwha Ocean Awaits for Certainty on Submarine Contracts with Indonesia

Busan: Contract certainty from the Government of Indonesia regarding the procurement of three batch II Changbogo Class submarines made by Hanwha Ocean, is still unclear. In fact, Hanwha Ocean has won the tender since 2019.
 
Since winning the tender for the procurement of three batch II submarines for Indonesia in 2019, Hanwha Ocean has not received a Letter of Credit (L/C). This means that Indonesia has not made any payments in this regard.
 
Although payment has yet to be received, Hanwha Ocean has pre-ordered components for the three submarines. This is done in order to meet the supply deadline.

Kim admitted that he did not know anything about the reasons why the Indonesian Ministry of Defense had not signed the L/C. Hanwha Ocean said that before the Covid-19 pandemic, relations with the Indonesian government were quite good.
 
"We (Hanhwa) regard Indonesia as a good and very important business partner. And we always support Indonesia in terms of funding, as well as aspects of maintenance and technology," said Hanwha Ocean's Head of Naval Ship Business Management Development, Kevin Kim in a meeting with 13 journalists participants of The Next Generation Indonesia Journalist Network on Korea in Geoje Island, Gyeongsangnam, Korea, last Friday.
 
Kim believes there will be the best way out in this matter. When asked about the change in Indonesian leadership after the 2024 election, Kim remained optimistic that this project would not experience a negative impact.
 
"To be honest, I don't know the exact political conditions in Indonesia. However, our experience has shown that political dynamics do not affect business relations," he said.
 
"Hanwha's relationship with the Indonesian government is very good. In the midst of the current situation, we are still trying our best to maintain good relations with the Indonesian government," Kim added.
 
Indonesia and South Korea have completed batch 1 of cooperation in making submarines, through Daewoo Shipbuilding & Marine Engineering (DSME), the former name of Hanhwa Ocean. The first batch consisted of KRI Nagapasa-403, KRI Ardadeli-404 and KRI Alugoro-405.
 
Meanwhile, Alugoro officially became the Indonesian Navy's defense equipment, after being inaugurated by Defense Minister Prabowo Subianto at PT PAL Indonesia (Persero) Surabaya, East Java, on March 17 2021. (Kevin Schreiber)
 
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