Nuclear submarine program gets first budget of W96.6b, but fuel deal with US stalled

South Korea's budget for next year includes 96.6 billion won ($72.5 million) — the first-ever allocation for its nuclear-powered submarine program — but negotiations with the United States over nuclear fuel remain stuck at the starting line. Lawmakers have raised concerns that the project's timeline and funding are moving ahead before the fundamental question of how to secure fuel has been resolved.

The National Assembly's Defense Committee is set to hold a plenary session Monday to vote on next year's budget for programs under the Defense Acquisition Program Administration (DAPA).

The 96.6 billion won covers startup and design costs, broken down into five items in the committee's budget review report: a 44 billion won down payment for submarine platform design, a 41.33 billion won down payment for nuclear propulsion system development, an 8.6 billion won down payment for integrated combat system development, 1.67 billion won in research and development activity costs, and 1 billion won for facility construction.

The report said budget allocations and their appropriate scale should be determined "by comprehensively considering the implementation of overseas consultation procedures and the overall conditions necessary for project advancement."

The total project cost has yet to be set. Minister of Planning and Budget Park Hong-keun said at the Future Defense Strategy Committee in May that costs could reach as much as 28.9 trillion won under certain assumptions. The final figure is to be confirmed in the first quarter of next year following a cost analysis by the Korea Institute for Defense Analyses. The report noted that preliminary research was still ongoing when the government drafted its budget proposal, concluding that "it appears the budget was calculated on a provisional basis, as it was difficult to finalize detailed project content and required costs."

Domestic procedures are moving quickly. The Defense Project Promotion Committee approved the basic strategy for the Jangbogo-N program on Nov. 6. The goal is to begin development next year, sign contracts with industry partners, and launch a lead vessel of roughly 8,000 tons in the mid-2030s. A feasibility study was waived in August on security grounds.

Fuel remains the biggest obstacle. The government has decided to use low-enriched uranium with less than 20 percent enrichment, but who will supply the fuel, how, and when has not been determined. Without settled fuel terms, the basis for reactor design, related facilities, and operating cost estimates could be undermined.

The report said the existing South Korea-US nuclear cooperation agreement is insufficient to support the military use of fuel for nuclear submarines, and that a separate cooperation agreement under US atomic energy law would be required. Such an agreement must undergo a 60-consecutive-session review by the foreign affairs and armed services committees of both chambers of Congress. The report noted that since consultations in June, "no progress has been confirmed regarding the conclusion of a nuclear fuel supply agreement." It added that, given the budget now covers system development, "there is a need to carefully examine, for each detailed task, whether overseas consultation results must be finalized and whether a start within the year is feasible."

Negotiations have made no headway since their initial step. A senior Cheong Wa Dae official said Thursday that on the South Korea-US nuclear submarine and atomic energy consultations, "we have not yet entered a normal stage of discussion, but we are making great efforts to do so as soon as possible." The two countries held their first follow-up consultations in Seoul on June 2 and 3, chaired by a deputy foreign minister, but have not scheduled a next round. Foreign Minister Cho Hyun met US Secretary of State Marco Rubio in Paris on Tuesday (local time), but the two sides were unable to coordinate a date to resume talks.

The US congressional variable has also grown. With the Democratic Party winning control of both chambers in the midterm elections, observers say ratification of the agreement could become even more difficult.