Philippine Frigate Controversy Deepens

The future Philippine frigate (HHI rendering)

By The Maritime Executive 02-19-2018 04:44:00

Philippine Senator Antonio Trillanes IV is launching an inquiry into the details of the Philippine government's $336 million frigate contract, the nation's biggest naval acquisition program in decades. 

The Philippines Department of Defense has ordered two frigates from Hyundai Heavy Industries (HHI) as part of a larger military modernization program. Under the leadership of Defense Secretary Delfin Lorenza, the department decided that the vessels would be delivered with the Korean-made Hanwha Naval Shield combat management system (CMS, the computer network that serves as a warship's nerve center) instead of the widely-used Thales Tacticos CMS, the system initially specified. 

The Philippine Navy objected, and Navy chief Vice Adm. Ronald Mercado insisted that the Hanwha system did not meet requirements. The navy wanted to ensure that the CMS should be compatible with Link 16, the NATO standard battlefield communications protocol. Thales Tacticos is Link 16 compatible; Hanwha Naval Shield is not, although Hanwha is working on an update and expects it to be ready in 2019.

Vice Adm. Mercado was removed from his post over his opposition to the Hanwha purchase in December, three months before his retirement date. "I question [Mercado's] intention behind his fixation with one specific company [Thales] for the combat management system of the frigate acquisition project," said Lorenzana at a December 20 press briefing. Lorenzana estimated the cost premium for choosing Thales Tacticos over Hanwha would be $7 million per hull on the $168 million per vessel construction contract, a cost increase of four percent. 

Senator Antonio Trillanes IV is now leading an inquiry into the circumstances behind the government's preference for Hanwha. The paper trail on the procurement decision appears to lead back to Bong Go, special assistant to Philippine President Rodrigo Duterte. Last January, Go (or another individual in the president's palace) provided Secretary Lorenzana with a memo favoring the Hanwha system on the grounds of the firm's customer service advantages. Go has denied any involvement, and after testifying in a senate hearing Monday, he said that the investigation into the contract is a threat to the national defense. "The Philippine Navy badly needs this project to protect our seas, but this controversy is seriously derailing the implementation of this security measure," he told reporters. 

At the hearing, Adm. Mercado's successor, Rear Adm. Robert Empredad, testified that the Philippines may not have any say over which CMS it buys. "I’m still preferring Tacticos, but contract says it is the supplier [Hyundai Heavy Industries] that will have a sole decision to decide on what system to put in our frigate,” he said.