The Department of Budget and Management released the initial funding worth PHP3 billion for the Philippine Navy’s (PN)’s acquisition of six offshore patrol vessels (OPVs).
The Special Allotment Release Order (SARO)-BMD-D-22-0004970, was released to the Department of the National Defense (DND) on Thursday, to “cover the funding requirement for the Offshore Patrol Vessel Acquisition of the Philippine Navy under the Revised Armed Forces of the Philippines Modernization Program.”
Earlier, DND Secretary Delfin Lorenzana said South Korean shipbuilder, Hyundai Heavy Industries (HHI), was selected by the PN’s technical working group (TWG) for its OPV project which consisted of six ships.
“And recently they (PN TWG) chose Hyundai of (South) Korea. They also make our two frigates and they make two corvettes. What the Navy sees as an advantage there is that those ships have the same system, then if we need maintenance or whatever, the South can easily come here. Koreans (And recently, the [PN TWG] has selected Hyundai of [South] Korea. They are the ones who built our [Jose Rizal-class missile frigates], they are also the ones building our two [missile-armed corvettes]. The Navy sees that having [HHI] build all these ships is the similarities in their systems, and if we need to do maintenance or repairs, the South Koreans could easily come),” he said during an interview with government media.
Lorenzana hoped that the contract for the OPVs will be signed before President Rodrigo R. Duterte’s term ends on June 30.
The DND earlier said it is now looking for new proponents for the PN’s procurement of six OPVs due to pricing issues with Australian shipbuilder Austal.
“Pending our approval of the contract for the purchase, they (Austal) said the cost has increased — materials, labor, and everything. They asked for additional payment. I think our budget is PHP30 billion, they want PHP12 billion more for the six OPVs or they said we can reduce the number from six to five,” Lorenzana said.
He added that he can no longer ask the DBM for additional funding.
However, he also said reducing the number of OPVs to be acquired is not an option for the PN.
Lorenzana said shipbuilders from France, Sweden, South Korea, Japan, Turkey, and India have expressed interest in the PN’s OPV project.
Initially, Austal was believed to be the frontrunner in the OPV project.
The OPV project is expected to replace the World War II surface assets decommissioned by the Navy.