Torpedo deal questions
The issue of Defense Ministry procurements being awarded directly to favored companies has been raised once again, following an exclusive report by Skai radio and Kathimerini last week that two businessmen took part in a meeting with several ministers, resulting in an effort to award lucrative contracts to the two businessmen. The one contract, worth some 100 million euros, involves the production of torpedoes for the navy’s new German-built submarines. Skai reported last Friday that the Interministerial Defense Industry Committee met the previous Friday. According to a Defense Ministry announcement before the meeting (which was held at the Economy and Finance Ministry), its aim was «to examine investment programs concerning the domestic defense industry.» It said that the ministers of finance, defense and development, along with other officials, would attend. It did not mention that businessmen Panos Germanos and Evangelos Mytilineos would take part, nor did it specify the agenda. What reportedly occurred is that an effort was made for Germanos’s company (called Germanos), which specializes in retail electronics and batteries, to be awarded the torpedo contract. This is despite the fact that the company has not provided guarantees that it has the know-how to build torpedoes – something that it has never done. In addition, the last time the company supplied the navy, this involved battery systems for submarines. Even though this is ostensibly Germanos’s specialty, the issue is in the naval court because the batteries began to emit smoke. At the same meeting, Mytilineos, who manages the ELBO vehicle manufacturer and holds a 47 percent stake (the state holds 51 percent), sought the direct award of a variety of military vehicles. The report raises questions as to whether the defense minister informed the other participants of who would attend and what the purpose of the meeting was. The Defense Ministry issued a statement to Kathimerini on Friday denying that the meeting and its participants had been kept secret. It added that legislation regarding military procurements was being adhered to strictly. The statement accused the former PASOK government of having awarded contracts directly, «supporting foreign defense contractors, to the detriment of the Greek ones.» Kathimerini replied on Saturday that the meeting’s participants and agenda had not been announced earlier; Germanos did not have the necessary papers proving the company could build torpedoes; the Defense Ministry did not mention that the battery case was in court; Greece has bitter experience from direct awards of contracts.
