TAIPEI (Taiwan News) — The Ministry of National Defense said Tuesday it will expand domestic production of Royal Demolition Explosive, or RDX, and no longer seek imports to meet future demand after a major procurement contract was canceled.
The announcement followed the ministry’s decision to terminate a NT$590 million (US$20 million) contract awarded to Home-Max Furniture Trading Ltd. after the company failed to obtain an export license within the required 180-day period, per NOWNews.
The ministry said it issued the tender because no domestic companies were capable of producing RDX, requiring it to procure the explosive from overseas, per CNA. To encourage broader participation, the bidding requirements were limited to proof of tax payments, international trade listed as part of the company’s registered business scope, and proof of legal registration.
The ministry said it collected NT$83.9 million in forfeited bid deposits and penalties from Home-Max and barred the company from participating in future defense procurement. It added that all future RDX requirements will be met through expanded domestic production capacity.
The KMT blamed the failed procurement on inadequate oversight of the ministry’s contracting process and said it would closely scrutinize the ministry’s budget, per UDN.
The Control Yuan also released a report in June criticizing the ministry’s procurement process. It said established defense contractors often face stricter scrutiny, while companies with no defense industry experience can qualify for contracts by meeting only the minimum requirements under the Government Procurement Act.
Meanwhile, KMT Legislator Hsieh Lung-chieh (謝龍介) alleged that lobbyists may have influenced the procurement, claiming Home-Max had been in contact with a retired military officer, per China Times. Home-Max rejected the allegation, saying Indian authorities refused to issue an export license because of geopolitical considerations.
Home-Max confirmed that it employs a retired military officer but said neither the officer nor the company has any affiliation with the DPP. The company also argued that politicians unfamiliar with the procurement process had turned the contract into political theater.
A senior military procurement official said in an interview Wednesday that the deal collapsed after lawmakers publicly disclosed that Taiwan planned to source RDX from India, per ETtoday. The official said only India, the US, and China can produce RDX at scale and argued that lawmakers’ disclosures enabled China to identify the supplier and pressure India.
The official said legislators should focus on whether contractors can fulfill procurement requirements and leave discussions of potential suppliers to closed-door meetings.
An insider told Liberty Times that the ministry had sought to hedge against the possibility of the import deal collapsing by including funding to expand domestic RDX production in the special defense budget. The source said opposition lawmakers later removed that item from the legislation and accused them of exposing the supplier, cutting the contingency funding, and then criticizing the ministry after the procurement failed.
