According to the Liberty Times Net, Thai Prime Minister Prayuth Chan-o-cha admitted on April 4 that their S26T submarine contract with China might not last long. The cancellation would not affect the two countries political and economic relations.

Rear Admiral Apichai Sompolgrunk, director-general of the Thai navy’s acquisitions management office, said the deal included three MTU396 diesel engines from Germany, VOA reported. These engines run the submarine’s electric generator set.

Christoph Ringwald, Vice President Brand, Marketing & Communication at Rolls-Royce Power Systems, stated that the company had supplied Chinese shipyards with engines, but they were not dual-use goods. Motor and Turbine Union (MTU) company is a brand of Rolls-Royce Power Systems.

He emailed VOA claiming, “The engines supplied to China under the product brand MTU are not controlled as dual-use goods and are, therefore, not subject to a licensing requirement.”

He refused to explain why Germany blocked MTU submarine engines from the China Shipbuilding Industry and Offshore Engineering Corporation (CSOC) for China.

However, the deal could be affected as Germany is bound to a European Union arms embargo imposed on China in 1989 after the Tiananmen Square massacre.

In 2017, the Royal Thai Navy (RTN) and the CSOC signed the submarine deal. The first out of three—which has already been purchased at $434 million—would be delivered by the end of next year.

According to the Bangkok Post, Thai Navy spokesman Vice Adm Pokkrong Monthatphalin said the RTN and the CSOC would meet this month to discuss the submarine engine issue.

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