Dispute Escalates Over 22.5 Billion Baht Chinese-Made Submarines

Chinese-made Submarines for Thai Navy

The dispute over the purchase of another two Chinese-made submarines at a cost of 22.5 billion baht has escalated as the opposition Pheu Thai Party on Sunday claimed it now has evidence to prove that the Thai-Chinese government-to-government procurement contract is invalid.

The Royal Thai Navy insists on the legitimacy of the purchase and will host a press conference to clarify the contract today.

Yutthapong Jarassathian, a Pheu Thai Party MP and deputy chairman of the subcommittee under the House committee on durable product items, state enterprises, ICT equipment and revolving funds, yesterday showed a copy of the submarine procurement contract to media.

He said the contract is not a genuine government-to-government deal as claimed because navy chief Adm Luechai Ruddit who signed on behalf of Thailand had no authority to represent the government and the Chinese company which signed the contract was also not representing the Chinese government either.

Only the prime minister or the foreign minister can legally represent the government in such deals and only the defence minister is able to be assigned that authority if necessary, said Mr Jarassathian.

More importantly, there is no part of the contract that stipulates the purchase of a second and third submarine as claimed by the government, he said.

On Friday, a sub-committee meeting over whether to approve the budget allocation descended into acrimony and members had to pause for a break before taking a vote.

The sub-committee chairman, Supol Fongngam of the Palang Pracharath Party, should not have been allowed to vote to break the deadlock, said Mr Jarassathian, adding he suspected someone had lobbied Mr Supol to vote in favour of the procurement.

Mr Fongngam, however, said he was required by the subcommittee’s meeting rules to give the final vote after Friday’s vote was tied at 4-4 and he was certain Mr Jarassathian knows these rules very well.

And since he is a government MP he saw no reason to vote in favour of the opposition’s stance against the government’s submarine procurement plan, he argued.

Defence Ministry spokesman Lt Gen Kongcheep Tantravanich also backed the deal yesterday, saying Mr Jarassathian’s observation that the contract is invalid is simply an opinion, not a ruling by any panel authorised to decide if the contract is a real government-to-government agreement or not.

Mr Fongngam said he was convinced by the navy’s explanation that failure to buy the second and third submarines would breach the terms of the contract and damage Thai-Chinese relations.

He was also in agreement, he said, with the navy’s reasoning that Thailand will have to invest in building its capacity in marine territorial defence to keep up with that of other neighbouring countries that all have submarines.

Mr Jarassathian said he now aims to convince the main House committee vetting the budget bill on Wednesday to revise the subcommittee’s approval of the procurement.

A source, meanwhile, said Adm Ruddit had assigned a team led by navy chief of staff Adm Sitthiphon Matkasem to hold a press conference today to defend the purchase against accusations made by Pheu Thai.

Mr Fongngam earlier said the submarine procurement isn’t a new project but one that has already been included in the fiscal year 2020 budget.

Mr Fongngam said because in the fiscal year 2020 (ending on 30th September) the navy had had its annual budget diverted to help fund the government’s COVID-19 relief projects, it had asked China to defer this year’s instalment to the coming fiscal year.