Court Approves Sweden's Icebreaker Contract Award to Korean Yard
Sweden’s Court of Appeal has dismissed an appeal challenging the ongoing procurement of a new state-owned icebreaker. In June last year, the Swedish Maritime Administration (SMA) awarded South Korea’s Hyundai Heavy Industries (HHI) a contract to build the country’s next icebreaker. In the tendering process, Finland’s Helsinki Shipyard came in second but decided to appeal the award decision, citing irregularities.
The matter was initially filed in an administrative court, which upheld the award to HHI. Helsinki Shipyard appealed the decision at the Administrative Court of Appeal in Jönköping, asserting that the reference vessels submitted by HHI in its bid did not meet the requirements set by SMA. The appeals court affirmed the icebreaker procurement decision in a judgement rendered last week.
In a statement after its appeal was dismissed, Helsinki Shipyard said that although the company was deeply disappointed not to have been selected, it acknowledged the court’s ruling.
The tender document required bidding shipyards to submit three different reference vessels, which would prove technical capabilities in delivering an icebreaker. For the first reference, shipyards had to demonstrate they had constructed a vessel in Polar Class1 to 6 or equivalent, and delivered in year 2012 or later. For this requirement, HHI referenced the New Zealand Navy replenishment ship HMNZS Aotearoa, which it delivered in 2020. HHI stated the vessel has a polar class equivalent of PC 6. Helsinki Shipyard doubted this designation, claiming that it could not be verified in any ship registers as the vessel (now sunken) was in military service.
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The next reference project was to show experience in construction and delivery of a vessel equipped with specific types of diesel-electric propulsion. HHI listed ROKS Donghae, a multi-purpose frigate of South Korea’s navy, which it delivered in 2021. The frigate utilized a combine diesel-electric or gas (CODLOG) propulsion system. Helsinki Shipyard argued this was a different propulsion system from the one specified by SMA. Further, the company argued that in icebreaking, there is constant change in propulsion force and direction, thus an AC/DC diesel-electric propulsion system is highly preferred.
With these arguments now set aside by the court, HHI will proceed with the construction of Sweden’s next icebreaker, valued at over $350 million. The EU will provide some funding, estimated to be around $35 million. Currently, Sweden has six state-owned icebreakers; Ale, Atle, Frej, Oden, Ymer and Idun. Most of these vessels were built in the 1970s and 80s and thus are nearing end of life. Icebreakers are critical to Swedish economy, specifically to support shipping in the Baltic Sea during winter.
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