Fincantieri, Finmeccanica Wins $4 Billion Italian Navy Contract To Construct Seven Patrol Vessels

Fincantieri, Finmeccanica announced today that they have won a 3.5 billion Euros (US$ 4 billion) contract for the construction of seven ships in the plan to renew Italian Navy fleet.

The contract involves one logistic support unit (LSS or Logistic Support Ship), six patrol vessels (PPA, or Multipurpose Offshore Patrol Ship) and four more in option and one transport and landing unit (LHD or Landing Helicopter Dock).

OCCAR (Organization Conjointe de Cooperation sur l’Armement, the international organization for cooperation on arms) has signed the order with the consortium (Raggruppamento Temporaneo di Impresa - RTI) consisting of Fincantieri, agent, and and Finmeccanica, through its subsidiary Selex ES, principal.

Fincantieri’s share amounts to approx. 2.3 billion euros and the one of Finmeccanica to about 1.2 billion euros. The contracts provide different activation phases.

OCCAR has started Phase 1 for the construction of the first PPA and the logistic support unit for a total value of 372 million euros, of which Fincantieri’s share amounts to 220 million euros and Finmeccanica’s one to 152 million euros. The activation of the next phases concerning the other units is expected to take place in the upcoming months.

The delivery of the logistic support unit is scheduled for 2019, while the first patrol vessel is expected to be delivered in 2021. The delivery of the following patrol vessels is planned for consecutive years from 2022 to 2025.

In general, this multi-year program for the renewal of the Navy’s fleet (known as the "Defence Act") will employ a total funding of 5.4 billion euros and foresees the construction, in addition to the aforementioned units, of one transport and landing unit (LHD) through a public contract with the Italian Ministry of Defense currently being finalized.

All three classes of ships are dual use vessels that they may be used for both standard military purposes and for civil protection and rescue at sea operations.

The consortium (RTI) was established according to the cooperation agreement in the field of naval vessels construction signed last October between Fincantieri and Finmeccanica. Pursuant to the agreement, Fincantieri acts as a sole interface to the client, while allowing to enhance Finmeccanica’s products range in the naval field.

In addition to building the vessels at its shipyards, Fincantieri will provide support over the lifecycle of the vessels in the first ten years, through the supply of logistic services (training courses, spare parts, technical documentation) during the construction of the vessels and of ISS or In Service Support (maintenance services), carried out during post-delivery operations, as well as components and naval machinery produced by the Marine Systems and Components Unit, such as shaft lines, wheelhouse, maneuvering propellers, fin stabilizers and other handling systems, the automation system and a part of the special supplies for PPAs delivered by the subsidiary Seastema S.p.A.

Finmeccanica, through Selex ES, will act as prime contractor for all of the new naval units' combat systems. Selex ES will provide sensors, such as the new multi-functional radar, and will also take on responsibility for all subsystems, included those provided by OTO Melara, WASS, MBDA and Elettronica.