Giants bid for Euro 100-500 mln frigate modernization deal

The modernization of two frigates owned by the Navy is attracting top international navel defense industry companies to Romania, such as Thales Nederlands BV, Lurssen Lar Investment, Finmeccanica (Orizzonte Sistemi Navali), Damen Shipyard, Lockheed Martin, STX Shipbuilding (STX Norvegia), Rodriquez Cartieri Navali (InterMarine), BAE Systems, and Thyssen Krupp.

According to market sources, these are nine of the 11 companies invited by Romania's Defense Ministry (MApN) to bid for a constract estimated to be worth €100-500 million by MApN State Secretary Ionel Lascu.

Some seven of these companies already have partnerships with local naval shipyards, according to Lascu. This is crucial for the tender, as the Ministry has requested that the modernization of the ships be carried out in Romania.

Thales is allied with Constanta Shipyard, while Lurssen Lar is allied with Mangalia Shipard. These are also the companies with the best chances of winning the tender.

BAE Systems, the company which brokered the purchase of the two frigates in 2002 from Britain, were invited to the tender "out of a sense of obligation," said Lascu.

The company allegedly failed to comply with its contract obligations to Romania, providing only 40 percent of the necessary maintenance for the frigates. Sources close to InterMarine said that the company is not interested in the bid.

The modernization of the Queen Marie and King Ferdinand frigates is a new stake for local shipbuilders also, as the local market has been sharply affected by the financial crisis, and orders have stopped. Sources in the field say that shipyards with the best chances are Constanta Shipyard, Mangalia Shipyard, and Damen Galati, who were already invited to participate in the tender. Daewoo Mangalia Heavy Industries, owned by Korean Daewoo group (51 percent) and the Romanian state (49 percent), could also be accepted, although Korea is not a NATO member, and the Ministry asks that the tender winner be familiar with standards stipulated by the North-Atlantic alliance.

Business Standard