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  • German and Greek Tiff Over Submarines
    Posted by Christina Mackenzie 8:57 AM on Sep 24, 2009

    Germany and Greece are having words over the decision early this week by Howaldtswerke Deutsche Werft (HDW) GmbH, the ThyssenKrupp (TKMS) unit that makes Germany's non-nuclear submarines, to cancel two submarine contracts with the Greek Defense Ministry because it has not been paid €524 million euros ($765 million dollars) ... even though the submarines are ready for delivery.

    blog post photo
    U-214 submarine. Photo credit: ThyssenKrupp

    Hellenic Shipyards SA, TKMS' Greek subsidiary, is claiming €300 million of the sum from Athens, the other €224 being million owed to HDW.

    The first of the contracts, awarded in February 2000, was code-named the "Archimedes Project", and it was for the supply of four U-214 submarines. TKMS says that HDW and Hellenic Shipyards tried to deliver the first 214-class boat to Greece in 2006, but Greece refused to accept it on grounds that “it listed” although TKMS claims "the vessel met and in some cases clearly exceeded all specified performance requirements."

    The second contract, Neptune II, was awarded in 2002 to retro-fit three 209-class submarines with fuel-cell propulsion.

    The work on both the new-builds and the upgrades was being carried out by HDW's shipyard in Kiel, and Hellenic Shipyards in Skaramangas near Athens.

    TKMS says the Greek Defense Ministry is now “in default of its contractual obligations,” and now wants the dispute to be put into arbitration. But a Greek defense ministry official insists that the Class U214 submarine was faulty, and said Greece would "defend the public interest" in the arbitration process. The official, speaking anonymously, said the German company "has already received more than €2 billion ($2.96 billion) - about 80 percent of the contract - and we could not continue paying for something we have not received."

    What HDW thinks it can do with four brand-new submarines is anybody's guess. Sell them on e-Bay? But then Greece apparently already owns 80% of them. This looks like it could get rather messy...

    Tags: ar99, Germany, Greece, subs

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