Romania cancels auction for EUR 1.6 bln corvette contract

The Romanian authorities have decided to suspend the public procurement procedure for buying four new multirole corvettes and refurbishing the two frigates operated by the country’s navy due to alleged irregularities. The contract was estimated at EUR 1.6 billion and one of the main conditions was that the corvettes should be built at a shipyard in Romania. The state secretary charged with carrying out the procurement of the multi-role corvettes, Andrei Ignat, on January 11 notified defense minister Gabriel Les that he spotted irregularities in the process and asked the Government to suspend the procurement process until the situation is clarified. His department already notified military prosecutors about reasonable suspicions regarding the legality of the procedures, according to a press release of the Defense Ministry. The ministry also announced that one of the three qualified bidders, namely Santierul Naval Constanta (in partnership with Naval Grup of France), asked in court the cancellation of Government Order 48/2018, which sets the rules for this procurement process. Minister of defence Gabriel Les speaking for Digi24 on January 12 confirmed that the procurement procedures were suspended and repeated the reasons invoked by the procurement department: irregularities (which, minister Les claimed, he was partly informed about) and the lawsuit initiated by Santierul Naval Constanta. Three international bidders were in the race for this contract, namely Dutch group Damen, French Naval Group (in partnership with Santierul Naval Constanta) and Italian group Fincatieri. Last year, Damen took over the management of the biggest shipyard in Romania, the former Daewoo Mangalia, after a deal with the Government in which the state became the majority owner, with 51% of the share, while the Dutch group held the remaining 49%. Damen also has a shipyard at Galati. Santierul Naval Constanta is controlled by Romanian investor Gheorghe Bosinceanu. Italian group Fincatieri also controls two shipyards in Romania. In recent months, politicians spoke about alleged international pressures on the Romanian authorities related to this procurement contract. Auction for EUR 1.6 bln corvette contract might be cancelled, Romanian minister says editor@romania-insider.com