HAMBURG, Germany / SKARAMANGAS, Greece: Howaldtswerke-Deutsche Werft GmbH (HDW), Kiel, Germany, and Hellenic Shipyards S.A. (HSY), Skaramangas, Athens, today canceled the construction programs signed with the Greek defense ministry in 2000 and 2002.
The first contract involves the construction of four Class U214 submarines with air-independent fuel cell propulsion for the Hellenic Navy (“Archimedes” program). Construction of all four submarines is now complete.
The second contract (“Neptun II”) involves the modernization of three Class 209 submarines, likewise through conversion to fuel cell technology.
Howaldtswerke-Deutsche Werft and Hellenic Shipyards offered the first Class 214 submarine, the PAPANIKOLIS, to the Greek client for acceptance back in 2006. The client did not accept the vessel, even though it met and in some cases clearly exceeded all specified performance requirements.
The outstanding payments now amount to 524 million euros. Of this amount, around 300 million euros is due to HSY. As a result, our client, the Greek defense ministry, is in default of its contractual obligations.
Over a period of more than two years HDW and HSY have held numerous discussions with the Greek government, but these have not led to a solution. For HDW and HSY, continuing the contract is no longer economically justifiable.
Following cancellation by HDW, HSY has exercised its right of cancellation due to default of payment. With the cancellation by HDW, HSY lost the main technology supplier essential for fulfilling the construction programs.
HDW and HSY intend to file for arbitration.
Since the acquisition of Hellenic Shipyards in January 2005, ThyssenKrupp Marine Systems has modernized and expanded HSY. Today, Greece’s largest shipyard boasts the most advanced production facilities for conventional submarines in the Mediterranean region.
BACKGROUND NOTES (from Hellenic Shipyards)
In February 2000 HSY undertook as Prime Contractor the procurement of four (4) class 214 submarines. This is the most advanced conventional submarine in the world and the Greek State was the first in the world to order it. The contract award provided for the building of the first submarine at HDW’s Kiel yard and for the building of the other three (3) submarines in Greece at HSY premises.
Submarine construction at HSY started in 2002-following the investments for the creation of the necessary infrastructure- while the first Kiel-built submarine, named PAPANIKOLIS was launched in Kiel, Germany on April 2004.
Further to the class 214 Program, in 2002, HSY was also awarded by HMOD the contract for the Mid Life Modernization and repair of three (3) type 209 HN Submarines (Neptune II Program).