22th, to 24th of May 2018

Saudi Arabia gives green light to the largest contract in the history of Navantia.


Only the signature is missing. Saudi Arabia has already given green light to Navantia to manu-facture five corvettes for its Navy. Some sources budget this request in about 3,000 million Euros, which guarantees a five-year workload in public plants. A contract to be distributed between the shipyard of Ferrol and San Fernando in Cádiz.

Although public company remains cautious and insists that continues to work to assure the success of the assignment, sources that know the operation claim that the country’s top officials – the equivalent of the Spanish Council of Ministers – gave free rein to the operation several days ago, and that even the Saudi king gave his permission, so far there is no written communication. And hence the caution.
They are only waiting for Navantia to receive the contract signed. The prices of oil, which plummeted, striking in full the major exporting countries, among which is Saudi Arabia, is a weight factor to the choice of the contract signing date. As with all such kind of assignments, the signing of the contract implies an important first economic outlay by the customer to the chosen shipyard, so the timing in this case is an important matter.

The order for the construction of five corvettes is producing a tense wait in the regions, Ferrol and the island of San Fernando, who will benefit from this business. These two areas are especially suffering unemployment as a direct consequence of the lack of asignements in Navantia shipyards. About 2,000 people will work on the implementation of this work, both belonging to direct staff and auxiliary companies. It will mean a change in the type Avante 2200 -of greater size- that has been exported prior to the Navy in Venezuela. The assignment will not only involve the construction of five ships, but also its subsequent maintenance and the training of crews and training in the handling of equipment. It will also include the construction in Saudi Arabia of the base to where the corvettes will be assigned, as well as providing the systems.

Since it became known that all formalities to sign the assignement had been approved in Spain -among them the relevant guarantees by the public company shareholders, Sociedad Estatal de Participaciones Industriales- the final outcome to the process was expected. Rep-resentatives of the workers in the San Fernando factory in Cadiz had declared this week that the announcement would be "a matter of days."
If these forecasts are met, the manufacture of ships would begin before the end this year once that the intention of the country Armada is to rely on them within a period of five years, so the construction of the ships would be superimposed.

The ships maintenance agreement will extend the relationship between Navantia and Saudi military authorities to a much longer period. In addition, the assignment which will export greater amounts of defense materials to the public shipyards, ahead of Venezuela and Australia, could open the door to other works. In fact, the country had already begun several years ago a tender for the purchase of frigates, which in addition to Navantia, French factories and the United States were also competing. However, the negotiations long-term process for the purchase of military vessels finally left this potential custom in the background when the country's authorities finally picked for the corvettes.

In recent weeks contacts between the heads of Navantia and the Saudi defense have been intensified. Knowledgeable sources say the operation after passing through the Spanish equivalent to the Council of Ministers, the King also expressed its agreement for this order.
Besides, the Ferrol shipyard relies on achieving this year another contract for export: the construction of two logistics ships for the Australian Navy.

(Source: La Voz de Galicia)