Italy, Qatar to Sign €5Bn Naval Contract

Italy, Qatar to Sign €5 Billion Naval Contract for Four Large Corvettes, Support Ship

PARIS --- Qatar is expected to award Italian industry a naval procurement package valued at about €4-5 billion euros, and according to Italian media a preliminary Letter of Intent could be signed today in Rome by Italian Defense Minister Roberta Pinotti and her Qatari counterpart, Khalid bin Muhammad Al-Attiyar.

The package covers four large corvettes and a logistic support vessel to be built by the Fincantieri group at its Riva Trigoso and Muggiano shipyards, while Leonardo-Finmeccanica will supply the ships’ radars, electronics and weapons, each company receiving about half of the contract’s value. In addition, Italy will provide extensive training and support services.

Some Italian sources say that Qatar will pay a 30% advance of the contract’s cost to expedite the process, which has been bogged down for several months by a last-minute protest and final offer by the French government, whose naval industry, led by shipbuilder DCNS and electronics house Thales, was also competing for the deal, but which has now been edged out.

Italian investors believe signature of the actual contract is imminent, as yesterday Fincantieri shares closed 3.8% higher and Leonardo-Finmeccanica (+ 2.05%) on the Milan stock exchange, whose main index close up 1.49%.

This will be the first large naval export contract won by Fincantieri since the 1990s, and marks the company’s return to the Middle East market, where Italy earlier this year reinforced its position by winning an order for 28 Eurofighter Typhoon fighters from Kuwait.

MBDA, the pan-European missile manufacturer, is tipped to win a missile package for the new ships valued at about €1 billion, with another €800 million package going to Leonardo-Finmeccanica’s defense electronics unit for the ships’ radars, other sensors and combat systems.

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