Philippines ends talks with Australian firm regarding new patrol vessels

The Philippines has ended negotiations with Australian shipbuilder Austal regarding a potential P30-billion deal for the construction of six off-shore patrol vessels (OPVs) due to pricing issue.

"They are already out," Defense Secretary Delfin Lorenzana said Tuesday. "We have already informed them."

Lorenzana said Austal, initially the country's partner for the building of offshore patrol vessels (OPV), asked for an additional payment of P12 billion for the project due to increased cost.

"Sa katagalan nating paghintay na ma-approve ‘yan ay sabi nila tumaas na raw 'yung cost na, pati materials, 'yung labor and everything. Humihingi sila ng dagdag [na payment]," he said.

(Due to the long time we waited for its approval, they said that the cost already increased, even the materials, labor, and everything. They are asking for additional payment.)

“I think ang budget natin is P30 billion. So they want P12 billion more for the six offshore patrol vessels or sabi nila ay i-reduce natin 'yung number from six to five,” he added.

(I think our budget is P30 billion. So they want P12 billion more for the six offshore patrol vessels or they suggested to reduce the number of vessels from six to five.)

The Philippine Navy, however, is not in favor of reducing the number of OPVs to five. "They really want six because they need it, we need it," Lorenzana said.

Lorenzana said they discussed a possible deal with Austal because the firm has a shipyard in Balamban, Cebu.

Other countries that expressed interest in the project are France, Sweden, Korea, Japan, and India, according to Lorenzana.

The Defense chief said they cannot ask for more funds from the government for the additional payment considering the economic impact of the COVID-19 pandemic on the country. 

Lorenzana earlier said he was hoping to sign the contract with Austal before the end of President Rodrigo Duterte's term in June.   —KG/KBK, GMA News