Germany Cancels Submarine Contract with Greece

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The German shipyard Howaldtswerke-Deutsche Werft GmbH (HDW), from Kiel, Germany, and its Greek subsidiary Hellenic Shipyards S.A. (HSY), of Skaramangas, Athens, announced the cancellation of the two submarine programs signed with the Greek defense ministry in 2000 and 2002. The companies claim the outstanding debtby the Hellenic government has accumulated beyond half billion euros. However, since the construction of the four submarines has been completed, and the client is over half a billion Euros in debt, HDW will gain little from the cancellation. However, a forthcoming arbitration, especially with post-election government due in a few months could resolve the crisis.


The “Archimedes” program involved the delivery of four Class U214 submarines, equipped with air-independent fuel cell propulsion. The construction of all four submarines is now completed. The air-independent fuel-cell technology was selected for the modernization of three Hellenic Navy Class 209 submarines, under “Neptun II” submarine modernization program. The lead submarine of the Type 214 Papanikolis-class was completed in 2006 but was never accepted by the Hellenic Navy. Two years later it was certified as seaworthy by the German MoD. The other three vessels, Pipinos,Matrozos and Katsonis have all been launched at HSY in Greece.

While the manufacturers agree that the client refused to accept the first vessel, they claim the Greek defense ministry has failed to pay Eur. 524 million over the last two years. “With this cancellation HSY has lost the main technology supplier essential for fulfilling the construction programs.” Warns HDW, asserting Greece risks grounding its modern submarine force by not complying with the terms of the contract. (In addition to the three Poseidonsubs, Greece has four Glavkos Type 209 vessels also built by the German shipyard.) In 2005 ThyssenKrupp Marine Systems acquired HSY, modernized and expanded it to become the largest shipyards in the Eastern Mediterranean. However, like many other shipyards, they currently suffer from the economical crisis, particularly the collapse of demand for yachts and merchant ships.