The Navy clarifies that the frigate project's direct Offset amounts to 7 billion baht, representing 15% of the project value, with domestic shipbuilding covering 20% of the hull structure. It points out that 100% domestic construction is impossible because imported equipment is necessary.
On 18 Sep 2026 GMT+7 at the Navy Auditorium, Rear Admiral Sarawut Chiyangkabut, Chairman of the Offset Procurement Policy Committee for the frigate project, stated that foreign bidders are required to provide economic and industrial benefits as part of the Terms of Reference, aiming to enhance national capabilities alongside acquiring military equipment.
The requirements are grouped into five categories: investment in Thailand; research, development, and technology transfer for ship design and construction; development of Thai workforce skills; joint production with Thailand; and utilization of Thai labor, materials, and products.
The minimum criterion for “actual value” in Offset is no less than 15% of the project value, reflecting real investments and expenditures with documented sources, cost details, and accounting figures—not arbitrary amounts. There must be Offset credits of at least 100% of the project value as a baseline. This credit reflects activities aligned with national goals and is a “policy credit,” not cash or direct investment. The Navy evaluates not just what is proposed or the amount but requires detailed plans, timelines, KPIs, results, monitoring, risk management, intellectual property protection, and readiness and experience in delivering both parts of the Offset.
Rear Admiral Sarawut added that for the second frigate, the Navy plans for at least 30% of the ship's total value to be built domestically.
He further explained the minimum requirement is 20% domestic construction of the hull structure. In reality, building a ship 100% domestically is unfeasible because machinery systems, weapons, and sensors must be imported. The Navy expects some subsystems to be produced locally, with several companies currently working toward this.
Regarding companies claiming 100% domestic shipbuilding capability, he noted the issue is complex and sensitive. Past attempts showed it was not feasible industrially. The Navy hopes this can serve as a starting point enforced contractually. The Offset value and proposed domestic investments are not simply the 7 billion baht entered into the system but reflect underlying costs and an additional layer of Offset figures.
After appeal processes conclude, the Navy will sign the Offset agreements again, with designated Offset recipients. The Navy cannot accept all Offsets, nor should it. Recipients must be capable to ensure real benefits. The Navy will finalize its role and strengthen both itself and the Offset recipients to stand independently.
Following the frigate contract signing, the Navy will establish criteria and procedures for Offset recipients, involving providers, recipients, and supervisors. The Navy will verify deliveries, and non-compliance with set criteria must be clearly stated in contracts. The government has directed the Navy to develop Offset guidelines after contract signing, which will be submitted to the Cabinet for acknowledgment.