While the German Bundestag’s Budget Committee did approve the procurement of four MEKO A-200 DEU frigates today, it has attached conditions to this authorization due to a 70 percent cost increase over initial plans and intends to be kept fully informed about the project’s progress.
By Lars Hoffman / hartpunkt
As hartpunkt has learned from well-informed sources, the German Federal Ministry of Defence (BMVg) is required to inform the committee immediately of any further cost increases or additional claims from contractors, as well as any delays that may arise. Additional expenditures may only take place after consultation with Parliament. Furthermore, the ministry is required to submit a quarterly report on the project’s progress.
Reportedly, the budget committee also stipulates in its resolution that subcontractors and shipyard sites that lost their contracts due to the cancellation of the F126 project should—wherever possible—be considered by the prime contractor, TKMS, for the construction of the four MEKO ships. This also applies should the option for four additional ships be exercised. In addition, an assessment is to be made as to whether parallel production of these ships would be feasible if the option is exercised.
According to available information, the committee also demands that the BMVg ensure all efforts are geared towards meeting delivery deadlines. The first ship is scheduled for handover in December 2029. Consequently, changes to performance specifications or the contract must not result in delays. In the past, according to industry sources, new capability requirements had repeatedly delayed shipbuilding projects.
Prime contractor TKMS welcomed today’s release of funds for the MEKO project. The company stated in a press release that this clears the way for the formal signing of the contract. It marks the largest surface vessel contract in TKMS’s history.
TKMS CEO Oliver Burkhard is quoted as saying: “We are aware of the responsibility to build the ships very quickly due to the security situation—a requirement that is also stipulated in the contracts. We will now tackle this task together with our industrial partners from across Germany. Punctuality in delivery is a key factor for us here.” Important preparatory work for the construction of the ships has already been carried out over the past few months. The shipbuilding work is being performed by the Rönner Group.
Funding of €6.3 billion was released today for the procurement of the first four ships. Exercising the option for four additional ships would require approximately €5.3 billion.
As reported by hartpunkt, the fact that the unit price of a MEKO frigate has risen by around 70 percent—to approximately 1.57 billion euros—contrary to the manufacturer’s initial estimates, was met with incomprehension in Bundestag circles last week. Reportedly, this is partly because the original cost calculation was based on the procurement of eight ships. The reduced quantity increases the cost of each frigate by over 130 million euros; additionally, TKMS must procure components not originally factored in (such as “strike-length” VLS launchers), adding roughly 15 percent to the total. Price increases by subcontractors account for over 100 million euros, whereas additional requirements from the Germany Navy—such as those aimed at improving the frigate’s drone defense capabilities—account for only about 80 million. The remainder stems from factors such as addressing obsolescence issues, support services, and costs associated with bank guarantees.
This article by Lars Hoffman was originally published in German language at hartpunkt.de. It has been translated and republished with authorization.
