MercoPress. South Atlantic News Agency

Uruguay makes payment to Spanish shipyard for construction of two OPVs

The deal for the OPVs with Cardama has had its ups and downs but it appears now to have advanced to the next stage

The Uruguayan Government this week made a US$ 8.4 million payment to the Spanish shipyard Cardama as the first installment for the construction of two new ocean patrol vessels (OPVs) agreed upon in July last year. The process has since been questioned and one Uruguayan Navy Admiral even retired from active duty amid the controversy.

Defense Minister Armando Castaingdebat insisted that the new units would “provide Uruguay with resources to face the challenges that both [countries: Argentina and Uruguay] have, especially those related to drug trafficking, illicit trafficking, human trafficking, and I believe that we also have a lot to do together on the borders of our countries.”

Regarding doubts surrounding Cardama's ability to complete the job, Castaingdebat hinted that such a matter had been settled. The total arrangement with Cardama amounts to € 82 million, it was reported in Montevideo. The vessels were acquired through funds set aside in the National Corporation for Development (CND) and General Revenue.

The new vessels with a capacity for about 80 crew members will have a displacement of 1,700 tons, 86.75 meters in length, 12.20 meters in beam, and a draft of 3.60 meters, which will allow them to reach a maximum speed of 24 knots. Its armament will be composed of a 30 mm bow cannon and 12.7 mm machine guns as support weapons.

They will also feature an aft platform to operate a medium-size helicopter, next to the hangar. According to Uruguayan Navy Chief-of-Staff Admiral Jorge Wilson Menéndez, these units may use the helicopter “thus extending its detection radius by means of the use of the surface search radar that the aircraft has beyond the radar that the ship has.” The OPVs will also have a stern ramp for the deployment of two rigid inflatable boats (RHIB) for interception.

Uruguay chose Cardama because it reportedly met the requirements set forth by the National Navy itself, such as the need for armament, a heliport, as well as other conditions for the fulfillment of the mission of caring for natural resources and the repression of illegal fishing. The Spanish shipyard's offer was the lowest cost, out of a total of eight international bids. It was also the one with the fastest delivery date compared to its competitors.

However, in the second semester of 2024, Uruguayan Navy Admiral Gustavo Musso requested to be relieved from active service over the purchase of the OPVs from Cardama for US$ 92 million. Musso, who had insisted that this company had no experience in the construction of this type of unit and had recommended a different one instead, submitted his resignation to Admiral Wilson.

In addition, the Uruguayan Senate's Defense Committee received a letter from China's Shipbuilding Trade (CTSC), which had participated in the bidding process and questioned Montevideo's final call. A tender in 2021 was declared void because all the proposals exceeded the Defense Ministry's budget of US$ 120 million. China's was the cheapest, at US$ 168 million. When a new call was made, China lowered its price and made itself available for negotiation.

Musso, who was planning to retire within six months, drafted a report in May in which he concluded that the best offer was that of the Spanish shipyard Godan, followed by the shipyards Cotecmar, from Colombia, and Kership, from France, the South Korean Hyundai and then Cardama. On July 17, then-Defense Minister Javier García announced that Cardama had been selected in a decision endorsed by “the advisory committee appointed by the MDN” and with “the advice of the National Navy.”

CTSC argued that the specifications “were never defined” in the second call for tenders. “We went from an 89-page document with requirements, guarantees, weighting factors, evaluation scores, etc., to receiving the requirements by phone or in a note of less than half a page.” The company insisted that it had sent a second offer in accordance with the available budget.

Then-Broad Front Senator Sandra Lazo insisted repeatedly that Uruguay should pull out from the deal with Cardama, a company risking bankruptcy. “Transparency and follow-up commissions were presented, which fell by the wayside because many times the press had more information than what was given in those areas which were announced with great fanfare,” Lazo pointed out. “Let's reshuffle and deal again,” she added despite admitting that the OPVs were needed.

At that time, former President José Pepe Mujica insisted “the Chinese market cannot be ignored” and said that the Uruguayan Government's decision to pick Cardama was “a diplomatic mistake” because the Chinese ”write down everything, they are neat. To go and talk to a Chinese diplomat is to know that there are three or four people who are listening over there and taking note of everything, down to the last detail. The Chinese send ambassadors who speak Spanish and who were previously educated in Latin American universities. They do not improvise anything. They are not like the Americans who send us an ambassador who does not speak a word of Spanish. They don't make those mistakes.” Hence, an apology to China was in order, Mujica argued.