Uruguay Cancels Controversial OPV Shipbuilding Contract

In a significant move, Uruguayan President Yamandú Orsi has announced the cancellation of a contract with Spain’s Cardama Shipyard for the construction of two Ocean Patrol Vessels (OPVs). The decision comes after years of delays and concerns over the shipyard’s financial stability, prompting allegations of potential fraud against the Uruguayan state. The government aims to recover millions already paid to the shipyard while pursuing legal action for breaches of contract.
Allegations of Fraud and Contract Breaches
President Orsi’s administration has cited “strong indications” of fraud in the dealings with Cardama Shipyard, which was awarded the contract under the previous government led by Luis Lacalle Pou. The contract, signed in December 2023, was intended to bolster Uruguay’s naval capabilities but has faced numerous setbacks. Orsi pointed to serious breaches, including a lack of technical capacity from the shipyard and significant delays in construction, with only 15% of the project reportedly completed.
The Uruguayan government plans to execute a 5% contract guarantee, amounting to approximately 4.1 million euros, and is seeking to recover around US$30 million already transferred to Cardama. Two Navy officers are set to travel to Spain to assess the minimal progress made on the vessels. The controversy surrounding the contract has sparked parliamentary debates, with calls for new, transparent tenders to replace the failed project.
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The situation escalated after an internal report in July 2025 confirmed ongoing non-compliance and delays. Additionally, four high-ranking Navy officers faced sanctions for their roles in the irregularities surrounding the contract. The previous administration is now under scrutiny, with accusations of negligence and corruption emerging from Orsi’s ruling Broad Front party.
Political Fallout and Future Implications
The cancellation of the OPV contract has ignited a political firestorm in Uruguay. National Party Senator Javier García, who served as Defense Minister during the contract’s signing, criticized President Orsi’s decision as a politically motivated maneuver that jeopardizes the country’s naval defense capabilities. He expressed concerns that the cancellation could expose Uruguay to lawsuits and damage its reputation for honoring contracts.
The fallout from this scandal may have lasting implications for Uruguay’s naval modernization efforts. As the judiciary investigates potential malicious intent behind the contract’s management, the government faces pressure to ensure that future tenders are conducted transparently and effectively. The controversy highlights the challenges of military procurement and the importance of due diligence in government contracts.
As Uruguay navigates this complex situation, the focus will remain on restoring confidence in its defense procurement processes and ensuring that the nation’s maritime security is not compromised.