Uruguayan Senator calls for Cardama deal for new Ocean Patrol Vessels to be dropped

Uruguayan Senator calls for Cardama deal for new Ocean Patrol Vessels to be dropped

Cardama’s ability or apparent lack thereof to fulfil the contract would corroborate Rear Admiral Musso’s assessment that the Uruguayan government chose to ignore

Broad Front (Frente Amplio – FA) Senator Sandra Lazo insisted Friday that Uruguay should backtrack on its decision to purchase two newly-built Ocean Patrol Vessels (OPVs) from Spanish shipyard Cardama, a company at risk of bankruptcy that has not yet commenced building the units ordered in mid-2023. The Spanish shipyard is still unable to obtain the collaterals required by the contract with the Uruguayan authorities.

“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 while recalling that the bidding had been declared void, despite which the executive went on with the acquisition proceedings and chose Cardama over other options. “It’s absolutely not serious,” Lazo went on. “Let’s reshuffle and deal again,” she added despite admitting that the OPVs were needed by the Uruguayan Navy.

Former Defense Minister Javier García who has now returned to his seat on the Senate “spoke, at some point, of lobbies, of interests… what interests do we have today in making a bad purchase with these characteristics? Who is going to benefit? It is all very opaque, that is why we are asking for the annulment,” Lazo also pointed out.

Uruguay’s Defense Ministry has now given Cardama 72 hours to raise the US$ 4 million it needs to finance the construction of the ships. Otherwise, the contract worth € 82 million will be declared void, it was explained in Montevideo.

After an unsuccessful international call for tenders, the Uruguayan government suggested purchasing second-hand vessels but the idea was dropped due to a technical report from the Navy. Cardama’s unilateral choice by the Luis Lacalle Pou administration sparked controversy. Rear Admiral Gustavo Musso, whose recommendations were ignored, retired from active service in disagreement. Musso had insisted that the company had no experience in the construction of this type of unit and recommended another bidder instead.

Musso, who planned to retire only six months later, had drafted a report 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. Ultimately, Cardama’s ability to fulfill the contract is highly questionable after years of financial difficulties resulting in several failed projects.

García downplayed the relevance of Musso’s note and insisted that the Spanish shipyard’s offer was the lowest cost, out of eight international bids. It was also the one with the fastest delivery date compared to its competitors. The vessels were to be acquired through funds set aside in the National Corporation for Development (CND) and General Revenue and were expected to be delivered by 2025.

At the time of Cardama’s selection, the Uruguayan Senate Defense Committee received a letter from China’s Shipbuilding Trade (CTSC), which had also participated in the process and questioned the South American government’s acquisition. A bidding process in 2021 was deserted because all proposals exceeded the Defense Ministry’s US$ 120 million budget. China’s was the cheapest, at US$ 168 million. When a new call for bids was issued, China lowered its price and made itself available to negotiate. CTSC argued that the specifications “were never defined” in the second call. “We went from an 89-page document with requirements, guarantees, weighting factors, evaluation scores, etc., to receiving the requirements by telephone or by a note of less than half a page.” The company insisted that it had submitted a second bid in accordance with the available budget.

Also back then, Lazo, who chairs the National Defense Committee, considered that the process resulting in Cardama’s choice “has not been very neat.” Her words matched those of former President José Pepe Mujica, who claimed that “the Chinese market cannot be ignored” and that the Uruguayan Government’s decision to ppick Cardama was “a diplomatic mistake.”

Mujica noted that 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.” At the time Mujica believed that this incident should not affect the Free Trade Agreement (FTA) Lacalle wants to achieve but “a slap on the wrist” was in order.

Lazo belongs to the Broad Front faction known as MPP -the Popular Participation Movement- founded by former guerrillas of the National Liberation Movement-Tupamaros, including Mujica.