The activation of the corvette program and the agreement on Eleusis

From Savvas D. Vlassis

We wrote last September, when all the media were talking about canceling the corvette program and preferring instead to activate the option for a fourth FDI HN frigate provided for in the contract, that the government remains “oriented to the implementation of the new corvette program but has postponed the award contract for next year”.

Indeed, on November 9, the Supreme Naval Council (ANS) decided to activate the corvette program, followed by its approval by the Council of the Chiefs of General Staff (CSGE). From there on, it will be promoted for further manipulations at the political level, with the first informing the competent Committee of the Parliament.

Also on the occasion of the September 19th meeting in Maximos, where the corvette program was examined, we highlighted the financing limitation for the specific program at €1.5 billion, as well as the fact that the cost, based on the proposals until then, was from 1.65 up to €1.9 billion, for 4 ships. This situation required decisions on the part of the government in terms of funding and that is why we wrote: “The government could consider a slight increase in the budget, in order not to reduce the number of ships to be acquired”.

In the end, no increase in funding was decided, with the result that the program was de facto limited to 3 corvettes. This development was reflected the day before yesterday in the decision of the ANS, which mentions a supply program of 3 corvettes + 1 as an option, i.e. exactly as was done with the frigate program.

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What matters is that the ANS has officially registered the superiority of the proposal of the Italian FCX ​​30 project, which it ranks first based on operational criteria.

The Italian proposal is accompanied by a special weight due to the expressed interest of Fincantieri to invest in the Elefsina shipyards, in order to give them a shipbuilding project. This point was the weak point of the French, but after the visit of the Minister of Defense Nikolaos Panagiotopoulos to the Naval Group facilities on November 7, information indicates that an improved proposal is being presented in this field as well. The transfer of part of the shipbuilding work to Greece and greater cooperation with Greek companies, as the results so far in the frigate program are not particularly satisfactory, would improve the competitive position of the Naval Group. Such a development would make the decision more attractive for the government, since it would reduce political pressures from the awarding of contracts without serious consideration and industrial participation of Greek companies.

In the meantime, on November 10, the Elefsina Shipyards Cleanup Agreement was signed by all the parties involved and now an official application will be forwarded to the court to continue the process under bankruptcy law. The consolidation will result in two new companies, the commercial-oriented ONEX ELEFSIS Shipyards Industries and the defense-oriented ONEX ELEFSIS Naval Maritime. In the first, funds up to €170 million will be invested after the transfer, of which $102 million will come from financing – a loan from the American DFC and the rest from the ONEX group. In the second, capital will be invested by the ONEX group and the Italian Fincantieri, as well as Italian financial institutions. The interest of the Italian shipbuilding company will be manifested by the signing of a relevant Memorandum of Cooperation (MoU) probably in November, as the signing of the Cleanup Agreement was expected first.

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In the meantime, on November 11, representatives of Fincantieri were in Athens and presented proposals for the configuration of the FCX 30.

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