Romania cancels $1.3 billion warships deal with France after failing to sign contract

Europe, News August 10, 2023 , by IRIA No Comments

Romania canceled a 1.2 billion euro ($1.3 billion) deal to buy four warships from France’s Naval Group after failure to meet the deadline of signing a contract with a local firm, Romania’s defense ministry announced on August 8, 2023.

French company Naval Group and Romanian shipbuilding firm Santierul Naval Constanta were unable to come to an understanding regarding the increasing expenses and failed to sign the contract.

According to the Romanian media reports, the contract was not signed due to attempts to change the initial contract terms, mainly regarding costs.

Romania’s Defense Ministry said in a statement, “The decision to cancel the specific procedure was taken… since the successful tenderer did not sign the framework agreement within the time limits requested by the contracting authority.” The statement added that “The funds required to declare the next-placed economic operator the winner were not identified.”

Romania selected France’s Naval Group and its local shipyard company Santierul Naval Constanta in 2019, to build four new Gowind multi-mission corvettes. Under the contract, Romania aimed to acquire new warships equipped with NATO-interoperable systems, MBDA Systems missiles, and Thales radar. The agreement also included the modernization of Romania’s Type 22 frigates as well as the creation of a maintenance center and a training center.

The Dutch group Damen and Italy’s Fincantieri were also fighting for the contract. The Dutch shipbuilding company came second and even filed an official objection with the anti-corruption authorities of Romania and the Bucharest Tribunal.

*^{The French Gowind 2500 Corvette. (Image Credit: Naval Group/via Twitter)}*

After the Russian invasion of Ukraine, Romania increased its defense spending to 2.5% of its GDP in 2023. The country is a NATO and EU member state and shares a 650 km border with Ukraine. Bucharest also hosts a U.S. ballistic missile defense system and thousands of soldiers of the NATO battlegroup led by France.

Romania is pacing efforts to modernize its military, however, its navy remains the least modernized force. The country has intensified NATO missions and defense exercises and pushing to buy military equipment including tanks, drones, submarines, and warships.

In May 2023, the Romanian government approved the country’s National Defense Ministry’s request to spend $1.1 billion on purchasing 54 units of used M1A1 Abrams tanks from the United States. In April, the Romanian Ministry of Defense awarded a $321 million contract to Turkish drone manufacturer, Baykar Technologies, for the procurement of 18 Bayraktar TB2 unmanned aerial vehicles.