Breaking: Swedish Maritime Agency Awards Icebreaker Contract to Hyundai Heavy Industries

The decision, first reported by Tekniikka&Talous, has been appealed by Davie/Helsinki Shipyard

Image: Aker Arctic

On October 30th, the Finnish news magazine Tekniikka&Talous reported:

The Swedish Maritime Administration has chosen Hyundai Heavy Industries to build Sweden’s new icebreaker. The ship will be built in Ulsan, South Korea.

This information is revealed in documents obtained by Tekniikka & Talous from the Swedish Maritime Administration in response to a request for information. The procurement decision was made on June 27, 2025. (translated via Google)

I reached out to the Swedish Maritime Administration, and they confirmed this to me via e-mail. In the reply from Anders Holmgren, he emphasized that this was not a choice:

SMA applies the Public Procurement Act, and we therefore cannot “choose” a supplier from the tenders received. The contract is awarded to the supplier who submitted the most advantageous tender based on the pre-determined parameters. That is, transparency and equal treatment must be built into the procurement process.

In this procurement, it was Hyundai Heavy Industries that submitted the winning tender, but DNY Finland Oy, who came in second, has appealed the decision to the Administrative Court, which they have the legal right to do.

It seems the criteria was simple: they selected the lowest-cost tender that met the minimum technical requirements.

In addition to HD Hyundai Heavy Industries (HHI) and DNY Finland (Davie/Helsinki Shipyard), Rauma Marine Constructions and Vard also made offers. The SMA provided this chart showing the costs by tender:

The chart does show ‘merit points,’ but there is no information given about how those were awarded or how HHIs compare to the other shipyards. In the end, “the tenderer with the lowest comparable cost converted to SEK is the winner.”

As the Tekniikka&Talous article points out, the cost difference between HHI and Davie/Helsinki shipyard’s tenders is quite small:

In practice, a difference of approximately EUR 11.8 million decided a procurement worth over EUR 300 million in Hyundai’s favor. The difference in the comparative prices between Hyundai and Helsinki Shipyard’s offers was 3.8 percent.

Brief Background

I described this program, which will build a vessel based on an Aker Arctic design, in a January article:

New Swedish Icebreaker Out for Bids

Sweden operates six icebreakers², four of which were built in the 1970s. Only one of these, Oden (delivered 1989), is suitable for polar operations. Sjöfartsverket, the Swedish Maritime Administration (SMA) issued a tender for the construction of two A-Class icebreakers in October of 2022 with an option to build a third. Designed by Aker Arctic of Finland, the new-built icebreakers will run on methanol.

In April of 2024, though, the SMA announced that no ships would be ordered from the initial tender because none of the bids met all of the requirements. In August, the SMA launched a new tender- but only for one vessel. According to a Swedish press report: (machine translation by Bing)

Money is one reason why only one ship is now procured. The funding that the Swedish Maritime Administration has received to build new icebreakers is simply not enough with today’s cost situation.

“The amount we have received from the government is based on an average value that was calculated on what icebreakers can cost in 2017. Since then, inflation has gone up, shipyard costs have increased enormously and the price of steel has gone up a lot. In addition, during this period, we have come to the conclusion that we should have methanol, which will also be a cost increase,” says Jonas Franzén (from the Swedish Maritime Administration)

The SMA’s goal is to sign a new contract early in 2025, with the vessel delivered in 2027 and fully operational by 2028. Bidding shipyards must have the capacity and knowledge to build the vessel and be located in a nation with which Sweden has a bilateral trade agreement.

Thoughts and Comments

This is only a quick summary of the news; I intend to take a more in-depth look at the situation in the near future.

Specifically, I intend to look at:

• the icebreaker reference/experience requirement contained in the tender. (It’s a pretty low bar)

• the use of different currencies, and whether a small change in exchange rate could change the deal (I’m sure the rules were clear in the tender, but that doesn’t mean the right currency choice would not give an advantage)

• European Union funding support and the associated grant rules associated with the EU’s Winter Navigation Motorways of the Sea III project. Work Package 2 of this project specifically calls for “acquisition of a new state-owned A-class Swedish icebreaker.” Additionally, the EU just allocated 56 million SEK (roughly 5.1 million Euro)* to help Sweden maintain its icebreakers.

Interestingly, this program began as a joint design venture by Finland and Sweden in 2020, but Finland later decided to build a smaller (and cheaper) B icebreaker first.

More to follow soon. Don’t forget to like, subscribe, and share.

Until next time.

All the Best,

PGR

PS: Thanks to Aleksi Kolehmainen at Tekniikka&Talous who provided me initial copies of the documents he received from the SMA. I later received the same documents (and two others) which I am still analyzing.

*An earlier version of this article incorrectly stated 56 million Euro instead of Swedish Krona.