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Greek Navy To Fast-Track Long-Delayed Submarine Order

Jun. 13, 2014 - 02:18PM   |  
By AGENCE FRANCE-PRESSE   |   Comments
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ATHENS — Greece's navy on Friday said it would complete a long-delayed submarine order that has sparked multi-billion-euro litigation between Athens and leading German and Arab shipyards in the next two years.

The dispute, spanning over a decade, concerns the building of three 214-class submarines at Hellenic Shipyards, Greece's main shipbuilding facility where hundreds of jobs are at stake.

A navy source said the three submarines — named Pipinos, Matrozos and Katsonis — are "absolutely vital to the navy and a huge effort will be made to complete them".

"We aim to complete Pipinos, which is 80 percent ready, by the end of this year, and all three in the next two years," the source told AFP.

The Greek submarine order to build four new submarines and overhaul two older ones, originally worth around 3.5 billion euros ($4.7 billion), has been dogged by technical disputes, litigation and bribery probes.

Former Greek defense minister Akis Tsochatzopoulos was recently jailed over bribes allegedly paid to Greek officials in relation to submarine orders signed in 2000 and 2002.

The navy will now pay 75 million euros out of its own budget and assign some of its own experts to work alongside a 800-man crew at the shipyard to complete the project, according to the source, who asked to remain anonymous.

The deal was delayed by Athens' initial refusal in 2006 to accept delivery of one of the new submarines, the Papanikolis, after Greek Navy inspectors declared it defective during test runs off the port of Kiel.

In 2011, Athens oversaw an agreement to transfer its majority stake in Hellenic Shipyards from Germany's ThyssenKrupp Marine Systems to leading Persian Gulf group Abu Dhabi Mar to keep the company running.

But the Greek state and the new Arab owners soon fell out over the remaining funds required to complete the order.

Late last year, Abu Dhabi Mar sued Greece at the International Court of Arbitration, demanding 1.3 billion euros in damages.

The Greek state retaliated in January with a counter-suit demanding up to six billion euros from ThyssenKrupp and Abu Dhabi Mar.

"Our position is, we paid out money, we did not receive what we paid for, and we'd like the money back," a defence ministry source told AFP. ■

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