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Troubled Waters For The Milgem Project?

F511_6

F-511 TCG Heybeliada, in Istanbul.

The Turkish armament procurement agency UDI is preparing for a renewed tender for the Milgem-S construction Project according to the news in Turkish media.

UDI will invite RMK ile Dearsan, Desan, ADİK, İstanbul, Sedef ve Yonca Onuk shipyards for this second tender.

Earlier this month, Turkish Prime Minister Recep Tayyip Erdoğan signed the report prepared by the Prime Ministry Inspection Board, which concluded that the contract was not in the best interest of the public and should be cancelled.

According to the contract the Turkish private shipyard RMK Marine was supposed to build 6 Milgem-S class corvettes for Turkish Navy. The contract was worth of USD 2.5 Billion.

In early 2013, the UDI, choose RMK as the main contractor for the Milgem-S construction. Both parties were about to complete the contract negotiations when the Prime Ministry Inspection Board started its inspections after receiving an official complaint from another shipyard.

This cancellation and renewal of the tender process stretches the acquisition procedure at least for another couple of years. Now the complete process of issuing RfI’s getting the RfP’s evaluationg the bids, etc. starts a new.

Two weeks ago, Turkish Navy issued a letter saying that it was ready to produce the remaining 6 Milgem in the Istanbul Naval Shipyard- where the existing two ships were constructed if it seems to be necessary. This is an act of desperation to prevent any prolongation.

The Istanbul Shipyard will be involved in the construction of the MILGEM follow-on build programme. According to UDI, whichever yard wins the MILGEM follow-on build programme will build its first ship – the third of the class – at Istanbul Naval Shipyard to benefit from the prior knowledge built up by the Turkish Naval Forces during the construction and integration of the first two vessels.

F-512 TCG Büyükada making a northbound passage on Bosphorus.

F-512 TCG Büyükada making a northbound passage on Bosphorus.

The Turkish Navy will get its Milgem class corvettes in the end come rain or come shine. But the cancellation of the Milgem tender derails the new type of procurement UDI was trying to implement. One may also argue that this cancellation may have effectively killed it.

What UDI was trying to carry out was to create shipyards with special abilities or centers of excellence in certain ship types. The Yonca-Onuk shipyard which constructs Kaan Class interception boats for Turkish Coast Guard is one of such COE’s. They are high specialised in constructing high speed boats made of composite materials.

UDI had identified seven yards – ADIK, Çelik Tekne, Dearsan, Desan, Istanbul Denizcilik, RMK Marine and SEDEF – as candidates to meet the needs of the naval programme across the surface warship and amphibious/auxiliary categories. The goal of UDI was to narrow down the candidates to between four and five qualified yards, of which two would service the complex warships build programme, while the rest would compete to build afloat support and amphibious vessels.

RMK and Dearsan shipyards were destined to be shipyards specialised in construction of complex steel warships. Apparently the plans of UDI were not appreciated by someone in the Turkish shipyard industry.

This is very ironic as I can recall that the most senior officials at UDI were openly complaining that they failed to create an interest at the Turkish Shipyards when UDI was trying to start various naval construction projects 5 – 6 years ago. The shipyards were very picky at that time as they were cosily building ships for the civilian usage with the civilian standards. But after the global economic crisis in 2008 the orders for the civilian ships has dried up and suddenly, the once ignored naval construction projects started to look very interesting.

But in the meantime, UDI has –rightly- decided that the needs of the Turkish Navy won’t be enough to keep all the shipyards occupied. Therefore UDI devised the plan to create specialised shipyards. Now this plan might be dead with the renewal of the MILGEM follow-on build programme.

In a few weeks, when the process of the second bids get really underway, we will see how long the construction of the follow up ships will be delayed and if the UDI’s plan to create specialised shipyards did survived.

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4 Responses to Troubled Waters For The Milgem Project?

  1. Pingback: Turquie : nouvel appel d'offres en vue apr&egra...

  2. kodlu says:

    This specific measure seems politically motivated against Koc Group.

    • If this specific measure is politicaly motivated against Koç Group, owner of the RMK marine shipyard why are the other defence contract givie to this groups other companies (like the Altay MBT, Cobra APV) are still gonig on? Can this move be really a political vandetta if the complaint of the shipyard which was not invited was submitted to the Prime Ministry Inspection Board in Spring?

  3. Pingback: The Keel Of The Third Milgem Corvette Will Be Laid On Friday |

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