ROME — A European naval program worth €6 billion (U.S. $7 billion) to build a new corvette is picking up speed this autumn as naval chiefs throw their weight behind it, even as experts warn the long awaited consolidation of Europe’s fragmented naval industry still faces stiff headwinds.
The European Patrol Corvette, or EPC, got a vote of confidence in October as navy representatives from Italy, France, Greece and Spain met remotely with industry chiefs to thrash out details of the four-nation program.
“The meeting had a really positive outcome – it was the first meeting with industry about the EPC, with lot of useful points emerging,” said Commander Andrea Quondamatteo, the Italian navy’s program manager.
With Portugal attending as an observer and Denmark reportedly showing interest, the program may yet add partners, while the three main nations are currently set to buy 20 vessels, including six for France, six for Spain and eight for Italy.
An industrial source told Defense News that each vessel is expected to cost around €250-300 million, making the Corvette program worth €5-6 billion, even before Greece confirms an order and any new members sign up.
That is cause for celebration at the European Union, where the EPC was inserted in its so-called Permanent Structured Cooperation, or PESCO list of recommended pan-European defense programs designed to create synergies among EU defense firms.
There is also €60 million in EU research cash in the offing, not a huge amount, but enough to show the bloc is on board. By December 9, the European Defence Fund has asked for a list of proposals for research work required to turn the ship into reality.
That proposal will be delivered by Naviris, the joint venture between Italy’s Fincantieri and France’s Naval Group, as well as Spain’s Navantia.
“The proposal will list the areas of research where the firms believe new R&D will yield technological advancements for use on the ship,” said Enrico Bonetti, chief operating officer at Naviris.
One option which will be explored is the potential use of full electric or hybrid propulsion, while other areas to be worked on include unmanned technology, modularity and data management, with a decision expected by June next year and possible disbursement of the funds by end 2022 or the start of 2023, Bonetti said.
“The proposal to the EDF is a starting point, it is about what we will be studying,” he said.
What is confirmed is that the vessels, measuring about 105 meters long and displacing 3,000 tonnes, will come in two versions: combat and long-range patrol.
Italy favors the first for keeping a well armed presence in the Mediterranean, where tensions are increasing due to Turkish-Greek rivalry and the recent conflict in Libya. With an eye on missions far from home, France is opting for the long-range patrol version.
Bonetti said both types would likely be able to mount a 3D radar, with nations able to choose their own. Flexibility built into the design would also allow customers to pick their own combat management system.
Both will be fitted for a medium- or short-range anti-air missile, with the MBDA CAMM ER system a candidate, while the combat version will offer anti-torpedo systems, including a decoy.
“The Patrol version will have a top speed of up to 24 knots while the Combat version will be slightly faster at 25-26 knots,” said Bonetti.
Eyes on subcontractors
Meanwhile, a list of about 40 companies, hailing from around Europe, has been drawn up as potential sub-contractors.
“Greek, Dutch, Danish, Norwegian, Swedish, Portuguese and German companies are on the list,” said Bonetti.
As the application goes in for EU research funds, nations are already putting up their money. Italy has already approved funding worth €1.5 billion for the first phase, which will ensure delivery of the initial four vessels, with the first ready in 2027, said Bonetti.
“We have a working group linking the companies which talks every day, but the challenge is synchronization, getting three nations to have funding in parallel to continue the development work at the same pace,” he said.
He said he was confident it could be pulled off and help European industrial synergies. “I’m convinced that the EPC could be a first step towards integration in the naval industry, which is far more fragmented than the aircraft, helicopter or tank sector,” he said.
That was a point made last year by outgoing Naval Group CEO Hervé Guillou, who warned that the excessive number of European yards ensure they are forced to export to survive. Between 2009 and 2018, China produced 136 military ships, of which 11 were exported, he said, while two U.S. shipbuilders built 78 ships, of which six were exported. Twelve European yards produced 80 ships, of which 49 were for the export market, he added.
That makes synergies essential to avoid overlap in Europe, and Italy and France boast a track record of cooperation after co-designing their Horizon and FREMM frigates together before they set up the Naviris joint venture between Fincantieri and Naval Group which is now working on the Corvette.
That said, so far the two firms have competed to sell their FREMM frigates. Italy has sold the vessel to Egypt, Indonesia and the United States, while France has sold to Morocco and Egypt and was reportedly upset when Italy started talks with Morocco this year.
Italy was similarly irritated earlier this year when French political opposition and an EU competition probe derailed Fincantieri’s long planned takeover of French shipyard Chantiers de l’Atlantique, which promised greater Italo-French ship building synergy.
One analyst countered that the currently improving political ties between Italy and France meant naval industry ties could be further tightened. “I am optimistic, it is a good moment,” said Jean Pierre Darnis, an associate fellow at the Fondation pour la Recherche stratégique in Paris.
He noted that Leonardo’s space joint venture with Thales was working well. “Compare that to Leonardo’s acquired firms in the U.S. and U.K., with which it has fewer synergies than expected due to firewalls,” he said.
One challenge, however, facing industrial cooperation within Europe was the mentality created by Covid, he said. “The pandemic has made countries keener on local production, on national technological sovereignty,” he said.
A second analyst noted that if the EU wanted to encourage member states to integrate their defense industries, the union would need to set an example with a shared defense policy.
“The EU still lacks that, so it is trying to increase cooperation at an industrial level,” said Pierluigi Barberini, a defense and security analyst at the Cesi think tank in Rome.
“However, to get real naval integration you need political will, and we are not there yet,” he said.
Tom Kington is the Italy correspondent for Defense News.