Canada to buy 12 hi-tech German submarines after bidding war

Canada has selected a German consortium to build a dozen cutting-edge submarines in one of the country's largest-ever defence contracts that will further deepen its Nato ties before a crucial summit this week, Report informs via The Guardian.

On Monday, the prime minister, Mark Carney, announced the winner of a tightly contested battle for the lucrative government contract to replace its fleet of ageing, secondhand subs, most of which are undergoing maintenance.

For months both ThyssenKrupp Marine Systems (TKMS) and the South Korean shipbuilder Hanwha Ocean have promised tech-heavy submarines and spillover economic benefits to Canada.

The winner, TKMS, is the largest manufacturer of non-nuclear submarines and a key supplier of Nato's fleet. Canada had previously indicated that both firms' diesel-electric offerings – the 212CD model sub from TKMS and Hanwha's KSS-III Batch-II submarine – suited its military needs.

The order for 12 submarines marks the first time Canada has bought brand-new vessels. The Royal Canadian Navy now has four submarines that were bought secondhand from Britain in 1998. Of the four Victoria-class subs, three are undergoing maintenance.

The new subs will probably be used to help give Canada a stronger foothold in the Arctic. The TKMS vessels are designed to use modern stealth technology to operate in contested areas with minimal detection, and will be able to conduct lengthy surveillance missions in key Arctic routes, including the Northwest Passage.

Hanwha's vessels are substantially larger than the German one, and the company and industry analysts said they would have given Canada a greater ability to deploy powerful weapons and conduct lengthy patrols deep in the ocean.

The submarine order itself is estimated to be worth more than $12 billion, but the contract also includes roughly half a century of maintenance, meaning the total bill could exceed $70 billion.

Canada's federal government and TKMS will still have to enter into negotiations to finalise the contract, a process that could take years.

Carney took a delegation of senior cabinet ministers to visit TKMS' building facility in Kiel, Germany, last year, and toured a newly built sub at Hanwha's facility in Geoje, South Korea.