Romania Terminates Long Delayed Deal to Build Multi-Role Corvettes 

Romania canceled a $1.3 billion contract awarded in 2019 to defense giant Naval Group that included building four warships. The government, which has been under pressure to modernize its navy to meet the challenges in the Black Sea, cited four years of frustrations with the French company’s refusal to sign the contract despite repeated warnings.

Romania’s Ministry of Defense said in a statement that it terminated the contract awarded to Naval Group which provided for four Gowind multi-mission corvettes, modernizing two T22 frigates, creating a maintenance center and a training center. The deal was to be executed in partnership with Romania’s Constanta Shipyard (Santierul Naval Constanta).

The decision to terminate the deal comes after a prolonged financial dispute between Naval Group and Constanta Shipyard that has prompted the French group to refuse to sign the contract due to concerns over rising costs. The latest warning came in June when the Defense Ministry issued an ultimatum to the Naval Group to finalize the contract soon or risk forfeiting it to the second-place bidder.

Apart from financial disputes, questions have also been raised on whether the necessary equipment would be available to build the corvettes at the Constan?a Shipyard. The contract had called for the Naval Group to support the shipyard in terms of modernization and technology transfer. The original terms expected the delivery of the first ship in 2022.

“The decision to cancel the specific procedure was taken on the basis of the provisions … as the successful tenderer has not signed the framework agreement within the deadlines requested by the contracting authority,” said Romania’s Defense Ministry.

The cancellation brings to a close a dispute that has been running for four years and which started soon after the partnership between Naval Group and Constanta Shipyard won the contested tender for the four warships. Damen filed a lawsuit against the Ministry of Defense seeking the cancellation of the contract on the basis that the tendering process was not fairly conducted. The Bucharest Court of Appeal however dismissed the lawsuit.

A member of NATO since 2004, Romania has been under pressure to increase military spending and modernize its neglected navy. The four Gowind 2500 class corvettes were to be equipped with combat capabilities including the Setis combat management system that offers a comprehensive set of state-of-the-art NATO-standard capabilities for anti-surface warfare, anti-submarine warfare, and anti-air warfare. The warships, which are approximately 335 feet in length and 2,800 tons displacement, are also designed to accommodate a helicopter and drones, which lends versatility to its missions.

As the contract failed to move forward, Romanian authorities raised the possibility of inviting Damen to take over the contract. The Ministry of Defense however has ruled out this option owing to a lack of funds.