According the Romanian press, Naval Group has been today declared as the winner with its partner (Constanta Shipyard SA – SNC) of the tender for the construction of four new multi-role corvettes.

Romania was pursuing a dual track of upgrading the two Broadsword (Type 22) class frigates (acquired from the UK in 2004) and acquiring four new multi-role corvettes to replace its FF Tetal and FF Tetal Improved.

The total cost of the program was estimated at €1.6 billion, and included the acquisition of ammunition (not the helicopter), initial logistic support, crew training, site collaboration (training center), offset agreements.

Romtehnica SA, which organised the tender, awards the contract to Naval Group which offered the lowest bid €1.2 billion (compared to €1.25 billion for Damen and €1.34 billion for Fincantieri).

The procedure was delayed for months due to several administrative and judicial issues. On 8 June, Defense Minister Gabriel Leş dismissed Andrei Ignat, state secretary of the Armaments Department, to overcome the situation. According to sources from the Ministry of National Defense (MapN) and quoted by the Romanian press, Andrei Ignat was supposed to have close links with former PSD president, Liviu Dragnea,who was convicted of arranging payment for two party members employed in fake jobs and paid by a state agency and was was sent to prison for three and a half years in May 2019.

Meanwhile, the end of the litigation at the Constanta Court of Appeals, through which Constanta Shipyard, as part of the “Association between Naval Group France and Constanta Shipyard SA”, requested the cancellation of the legal act “GD no. 48/2018 ” has also helped as well as the withdrawing of Fincantieri’s appeal in this procedures.

This victory is also a success for MBDA France which will equip vessels with Exocet MM40 Block-3 anti-ship missiles as it has also been declared the winner for the Coastal Batteries Programme. Indeed MBDA France was the sole contender for the acquisition contract of Mobile Missile Launchers Systems (SIML) with an estimated value of €137 million (VAT excluded).


Written by Julien Brugnetti (Senior Analyst) for OIDA Strategic Intelligence




The Romanian Navy (RN) is seeking to upgrade its naval forces, as it feels the need to protect more of its coastlines and territorial waters with versatile corvettes, in order to maintain its influence in the region such as its exclusive economic zone (EEZ), its missions for the North Atlantic Treaty Organization (NATO), and in international peacekeeping and humanitarian operations as outlined in Romanian White paper of Defence 2006.

Romania is pursuing a dual track of upgrading the two Broadsword (Type 22) class frigates (acquired from the UK in 2004) and acquiring four new multi-role corvettes to replace its FF Tetal and FF Tetal Improved.

In addition, Romania’s Defence Minister announced recently plans for three submarines to be built locally. This modernisation programme intends to take effect in 2020, and appears to be quite ambitious due to financial restrictions and limited competencies. For example, the Romanian Navy owns only a single SS Kilo Type-887 which has been inactive since 1997, and its SS Delfinul has been used for training courses at the Romanian Naval Academy, Mircea Cel Batran.




Coastal batteries to be signed in 2018


The Romanian Ministry of Defense has declared it was time to receive a government decision about the Coastal Batteries Programme.

This project aims to provide the Romanian armed forces with three new coastal Anti-Ship Missile Systems to replace the old Soviet P-15 Termit. The acquisition contract for the Mobile Missile Launchers Systems (SIML) has an estimated value of €137 million (VAT excluded), and should be budgeted between 2018 and 2023. The Defence Minister Mihai Fifor wishes the contract to be signed by the end of this year. The system is to be deployed in the Black Sea under the Romanian Navy’s control.

Once the government has given the green light, the MoD shall start the bidding process and direct negotiations, with preference for NATO or EU manufacturers, whose system has been delivered at least once in the past five years.

In addition, the Romanian State has declared selective criteria concerning the manufacturing, maintenance, components integration, and future modernisation. These activities must be located in Romania, and to be manufactured by a majority Romanian State share-owned local operator. Finally, the Romanian State is also seeking for a minimum level of technology transfer.

Regarding these specifications, four candidates are up to the job. The following table underneath displays the potential missile manufacturers, systems, and utility for the future Corvettes.

This contract will have a huge impact on the Romanian armed forces, as the MoD has planned to take advantage of this programme by arming not only the country’s future multi-role Corvettes, but also the Broadsword Type-22 Class Frigates with the same anti-ship missile system as the SIML for logistical and cost savings reasons.

The Romanian coastal anti-ship missile systems are currently based upon the old Soviet P-15 Termit missiles, and as a result, its integration capabilities with other navy assets will be a determining criterion, notably for the four new Corvettes.

Regarding the high value contracts (€137 million for the SIML, and €1.6 billion for the ships acquisition & modernization), the stakes for competition are great.  Subsequently, the Swedish company Saab has opened an office in Romania earlier this year in order to improve its odds of being awarded the Naval contract, and for other future prospects in the civil sector.



The multifunctional Corvette programme enters its final stage, and the competition is looking fierce


The initial programme was originally awarded in 2016 to Damen (including four Sigma Class Corvettes) by the former PM Dacian Cioloş’ government, but was however revoked by the new Romanian government and the Constitutional Court due to its non-compliancy with the legislative law.

The Corvette acquisition programme was relaunched by the new Grindeanu government for four « Multifunctional Corvettes », and the upgrade of its two Broadsword Type-22 Class Frigates acquired from the United Kingdom in 2004. This programme is under strict conditions and terms to tender:

  • The ships must be manufactured in Romania – either in a shipyard located in the Black Sea and/or on the Danube river,
  • The manufacturers must be of NATO or EU membership,
  • First vessel must be delivered in the first three years – the four Corvettes must all be commissioned within a seven-year timeframe,
  • Deliveries are scheduled between 2018 and 2024,
  • Participant companies must present the amount of 1,000-ton ships which have been produced and delivered over the last 15 years,
  • Turnover and solvency indicators must be provided,

Initially, four European companies and a Turkish company competed for this commission. However, only the four European companies, Damen, Fincantieri, Naval Group, and TKMS remain in the race.

The procurement has been divided into three stages: qualification, dialog and evaluation of the submitted offers. The qualification stage took place over a period of 56 calendar days following the publication date of the call for participation, according to the documentation, which was dated Feb. 26, 2018. The stage of evaluation of final offers will end in October 2018. We should remind the parliament already validated the program in February 2018.

The total cost of the program is estimated at €1.6 billion, and includes the acquisition of ammunition (not the helicopter), initial logistic support, crew training, site collaboration (training center), offset agreements.

According to the Defence Minister Mihai Fifor, the offset agreement which will accompany the acquisition programme, will be used to upgrade the Broadsword Type-22 class Frigates (estimated at €220 million), and Corvette maintenance. The upgrade program will also take place in Romania.

As the Romanian Navy is seeking to integrate its new ships into their existing fleet, the RN will very likely choose the same type of anti-ship missiles for the Corvette and the Anti Coastal Batteries.

The battle between ship makers is harsh as the French, the Italians, and the Dutch, are massively lobbying through their respective embassies.

Damen recently bought 49% of Daewoo Mangalia Heavy Industries from Daewoo Shipbuilding & Marine Engineering (DSME) which has increased Damen’s chances of success. In fact, Damen bought 51% of the capital but had to divest 2% to the Romanian State which exercised its preemptive rights. The shipyard was in trouble as its former shareholder Daewoo was having financial difficulties. Since the government acquired a part of Mangalia Heavy Industries, strong ambitions for the company have been heard, and intends it to become one of the most important shipyards in the Black Sea. Currently, it employs directly and indirectly over 6,800 people.

Fincantieri joined the competition with a large advantage: Romanians make up more than 25% of Fincantieri’s total workforce. The company’s Vard subsidiary manufactures cruise and luxury ships, but has the capacities to accommodate military shipbuilding (in Brăila and Tulcea), especially as it would imply a long-term commitment. Fincantieri has already invested €150 million in these shipyards – they can be considered today as some of the most modern shipyards in Europe.

Fincantieri has unveiled an updated version of its Abu Dhabi Corvette in order to align with the Romanian’s criteria:  100 metres in length, and over 2,000 tons in weight with a non-retractable hangar, allowing more autonomy and UAV operations.  Regarding weaponry, Fincantieri, stated that it is open to work with other manufacturers, not only MBDA. The new Corvette must be equipped with a hull mounted sonar as well as a towed array sonar.

The anti-ship missile launcher will most likely be moved behind the mast, and also equipped with a vertical launch system (different from the originally installed anti-ship launcher).

If Fincantieri is awarded the contract, the company will divide the workload between the two sites with only Romanian companies. Finally, Fincantieri’s commitment to Romania can be perceived through its actions, such as it recently announced it was awarded an international contract, which would necessitate the work of Romanians.

Naval Group recently partnered with the Romanian Constanta Shipyard to deliver the four corvettes. If Naval Group is awarded the contract, the Corvettes will be manufactured in Romania under a Transfer of Technology agreement. The future Corvettes will be like the Egyptian Navy’s Corvettes as they meet the Romanian’s technical expectations. The French company reported it is ready to perform a full transfer of technology in order for the Romanian shipyard to ensure the maintenance of all its ships. The Romanian Constanta Shipyard is apparently ready to manufacture military vessels. The corvette made by Naval Group can be equipped with VL Mica missiles (from MBDA), even though the company is ready also to work with other companies to meet Romanian Navy requirements.

TKMS has probably offered an adjustable solution as its hangar is too small for standard helicopters (10-tonne-class rotorcraft).

Damen appears to be leading the acquisition process:

  • From a strategic point of view, it already owns a shipyard in Romania and has recently acquired Daewoo Mangalia Heavy Industries,
  • From a technical point of view, Damen’s Sigma Class Corvettes have the highest autonomy and the top speed among the four competitors, and is among one of the heaviest Corvettes with the Gowind 2500 in the industry. This is a major criterion for the Romanian Navy as it is looking for a large Corvette to ensure the safety in an increasingly coveted Russian Black Sea,

The K130 Corvette offered by the German company TKMS will most likely fail as it currently lacks a proper aircraft hangar (currently too small for the 10-tonne-class rotorcraft) and cannot be actually manufactured in Romania as no agreement has been signed with any local shipyards.




Romania paves the way for new submarines


Romania has a strong geo-strategic maritime position as more than 38% of the Danube flows through its borders, and 245km of coastal zone along the Black Sea. Unsurprisingly, the Romanian Naval Force is the most advanced sector among the three Romanian armed forces. The Romanian Defense Minister recently suggested the country could acquire three new submarines.

The Defense Minister Mihai Fifor presented his plans to accord the Romanian Navy with three new submarines. The medium-long term programme, which could start as soon as 2020, is currently being assessed by the Navy, and remains in the first stages. Indeed, the technical analysis has not been concluded, neither has it been approved by Parliament officials. Romanian officials and military officers are still discussing the needed type of submarine. French, Germans and Swedish manufacturers are among the potential suppliers for the materials.

The Defense Minister Mihai Fifor stated the program will be executed in a competitive way and everything will be done to serve Romanian interests. Consequently, Romania will install offsets as well as supervising the manufacturing of theses submarines in the country. For the moment, the value of the planned purchase has not been disclosed.

These submarines are aimed to replace Romania’s only submarine, the SS Delfinul (Kilo project 877E). The submarine was put on hold in 1997 due to battery maintenance, and has been inactive since. It is currently based at the Romanian Naval Academy for training purposes.

This change has to be put into context, and must be perceived as Romania’s willingness to dedicate this year’s Naval acquirements. However, financing could only be allocated between 2018 and 2026. The Minister Mihai Fifor outlined the need to modernize the Navy in order to turn Romania into a major player in the Black Sea, where challenges are increasing, notably due to a wider Russian presence. In addition, Russia has already increased its presence within the Ukrainian Exclusive Economic Zone (EEZ). The new submarines would in fact serve this purpose by reinforcing its operational capabilities.

Romania has already decided to buy four new multifunctional Corvettes for €1.6 billion which will cut further funding for material acquisition.

Behind this increasing worrying presence in the Black Sea, lurks the ambition of various States to seize and exploit natural resources, especially gas and oil. Exxon and OMV Petrom recently estimated a specific region of the Black Sea to contain 100 billion cubic metres of gas. Furthermore, the Russian company Lukoil confirmed another 30 billion cubic metres in another nearby region. According to official data, Romania seems to be the most active player in terms of exploration. This situation seemingly justifies Romania’s actions to secure its EEZ by upgrading its naval capabilities.

Download our Case Study #04 (13 pages) with tables and figures available in pdf format here :




Written by Julien Brugnetti (Senior Analyst) & Benjamin Voisin (Finance Analyst) for OIDA Strategic Intelligence



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