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Greece Loses Submarine Contracts

by: Matthew Potter
September 23, 2009

Category: Business Line, Contract Awards, Countries, Events, Greece, logistics, production program, Restructuring, ThyssenKrupp | RSS 2.0

Normally it is the government customer who ends a contract for non-performance or because they cannot afford it anymore. Today it was announced by ThyssenKrupp that the shipbuilder was ending a contract with Greece for new construction as well as upgrading existing ships and submarines. The company claims that the Greece Ministry of Defense has failed to pay them for the work done.

The original contract was for the construction of four advanced diesel electric submarines as well as modifying and upgrading three older ones already in use by Greece. In 2007 the first new submarine was ready but Greece didn’t take delivery and refused payment. ThyssenKrupp has been trying to go into arbitration over the deal but has now decided to go ahead and cancel the contract. The company has seen major contraction and loss of business due to the global economic downturn.

The Greek government is blamed for failing to negotiate or move out on the contract. There is an election upcoming and the opposition is expected win and has used this issue as part of their campaigning.

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