TKMS plans on track after Germany scraps frigate project over cost

German shipbuilder TKMS says it will deliver the first Meko A-200 DEU frigate to the German Navy as planned in 2029, following the cancellation of the troubled F126 frigate programme. 

"The announcement to procure four ships in the first step with an option to expand by a further four opens up the prospect of involving the German shipbuilding industry," TKMS chief executive Oliver Burkhard said on Wednesday. "We are open to talks with our industrial partners."

"TKMS began preparatory work in February," Burkhard said, adding that the shipyard could deliver an internationally proven, cost-efficient and scalable vessel type.

F126 cancelled

Germany has cancelled a multibillion-euro order for six new F126 frigates from a Dutch shipmaker, the Defence Ministry said earlier on Wednesday, citing delays and rising costs.

Main contractor Damen Schelde Naval Shipbuilding (DSNS) was due to deliver the first frigate in mid-2028, with the rest to follow by 2033. However, the company has been unable to meet the agreed timeframe and budgetary requirements, the ministry said.

The ministry said it had considered switching to a new contractor but ultimately decided against it.

Germany has massively boosted defence spending in the wake of Russia's invasion of Ukraine, as it seeks to upgrade its armed forces and increase contributions to NATO.

In a major blow to those efforts, a joint multibillion-euro fighter jet project with France and Spain dubbed FCAS was scrapped earlier this month after years of preparations because Airbus and Dassault were unable to agree on the construction.

The F126 project, launched in 2020, had come to a virtual standstill last year.

Total costs were initially estimated at some €10 billion ($11.3 billion), with some €2.3 billion spent so far.

Should the project be continued with another contractor, total funding is expected to rise to more than €18 billion, according to the ministry.

In March, Germany decided to acquire eight Meko A-200 DEU frigates, primarily intended for sea-based anti-submarine warfare. The ministry reiterated those plans, describing them as a national priority and of the utmost importance within NATO.

Regional government welcomes decision

Claus Ruhe Madsen, the economy minister of Schleswig-Holstein, the state where TKMS is located, said he welcomed the Defence Ministry's decision and was pleased that the state could make an important contribution to strengthening the German Navy. 

The decision strengthened sites in Schleswig-Holstein as well as the entire coastal industry, he said. "Time is the critical factor. That could no longer be guaranteed with the current F126 planning and a four-year delay."

TKMS and defence group Rheinmetall are bidding for the naval shipyard German Naval Yards, which belongs to the French CMN Naval group. 

The yard builds large naval vessels such as frigates and corvettes, as well as ocean-going yachts. The two naval yards share a site and were long part of the same company. 

Both emerged from the former HDW shipyard, or Howaldtswerke-Deutsche Werft, whose origins date back to 1838. The former HDW surface shipbuilding division was spun off and now operates under the name German Naval Yards.