Justice looks into felonious frigate upgrade contract

The order came after a preliminary examination for the modernization contract of six “S-Type” frigates of the Hellenic Navy, while the proceedings were also sent to parliament in order to look into any responsibilities of the then Minister of Defense Yiannos Papantoniou. 

The damage allegedly suffered by the public, by the contract in question, tops 30,000,000 EUR and was signed in 2003 between Hellenic Shipyards- as prime contractor, with the Thales NederLand as subcontractor, and the Defense Ministry. 

Among those involved is the former general secretary for special planning and defense investment Sp. Traulos, who signed the contract, but also members of the negotiating committee. The case led to a demand by the prosecution after finding that there are conditions in the contract that act unilaterally in favor of the subcontracting company and against the public. The conditions included the price adjustment rate and the detailed formula adjustments which were amended in favor of the contractors, as well as the clause for not exceeding annual indexation, both as a percentage of inflation, and as a percentage of the original price, which was not at all in agreement with what was required. The frigate modernization program was adopted in 2001, by Akis Tsohatzopoulos but, along the way, it was found that the available funds were not sufficient for six vessels. For this reason, the Armaments Directorate was against the program, since the few available funds would result in limited improvements in the electronic systems of ships rather than the upgrade of their anti-aircraft defense, as the Navy wanted. Indeed, the timeframe of the implementation of the program spanned to 2010, but until then the ships would have reached 30 years of age. 

Furthermore, the contractor had not demonstrated a similar program with other frigates in the past, and of them reasons the then Armaments Directorate of the Navy had maintained the program was unprofitable, arguing that any funds should be used for the purchase of new frigates.

Nevertheless the then leadership of Defence Ministry insisted on signing the contract.

The file has already taken the road to the corruption investigator who will conduct the main investigation.