Nuno Melo Read Out the Frigate Bill Line by Line, and 325 Million Euros of It Comes Back to Portuguese Industry

For two months the argument about Portugal's frigate purchase has run almost entirely on adjectives. On Tuesday afternoon, at a hearing of the Comissão de Defesa Nacional (National Defence Committee), the Defence Minister read out the numbers.

Nuno Melo told deputies that the acquisition of three FREMM EVO frigates from the Italian shipbuilder Fincantieri comes to 3,914 million euros in total, and that 8.3 percent of that work, some 325 million euros, will be carried out by Portuguese defence firms. Measured on direct work alone, with armament stripped out, he put the domestic share at 10 percent.

The line items

The minister's breakdown was unusually granular:

• 893 million euros per frigate, plus 63 million in modifications requested by the Marinha Portuguesa (Portuguese Navy), giving 960 million euros per ship and 2,880 million for all three.
• 461 million euros for life-cycle sustainment.
• 310 million euros for armament, missiles and munitions.
• 130 million euros to adapt the naval base.
• 95 million euros to build up the Navy and the Arsenal do Alfeite shipyard, and to train personnel.
• 55 million euros for a floating dock, 40 million for test and training equipment, and 38 million for simulation and training.

Melo described the 960 million per ship as a fixed price that already includes the Navy's requested changes. Worth noting: the eight items as read out add up to 4,009 million euros, 95 million more than the 3,914 million total he gave. The gap matches the Arsenal do Alfeite and training line exactly, which suggests that item sits inside another rather than alongside it. The ministry has not published the table.

Which Portuguese firms, and why Italy won

Critical Software takes the combat systems and operational software, EID supplies the integrated communications fitted across the squadron, and Tekever provides the drones. Simulators go to a fourth Portuguese supplier, and the Arsenal do Alfeite is promised capacity building and technology transfer, plus what Melo called a long-term partnership bringing Portuguese industry into the value chain.

Contra-almirante António Fernando dos Santos Rodrigues Mateus, deputy director-general for Armament and Defence Property, explained the shortlist. Six ships from five states were considered. British vessels did not fit the criteria of the EU's SAFE loan instrument. Spanish ships turned out to carry more than 35 percent American systems, which made them ineligible. Dutch ships could not meet the timetable. That left France's Naval Group FDI and Fincantieri's FREMM EVO, and the Italian ships scored higher on the Navy's evaluation criteria.

On the comparison that did most of the damage in August, when critics said Portugal was paying far above what Italy paid for near-identical ships, the contra-admiral argued the Italian 2024 contract carries price-escalation formulas; corrected forward to 2030, he put the real Italian figure at 950 million euros a ship. He also defended the SAFE loan, citing the absence of fees and taxes and a rate differential between EU and Portuguese borrowing of at least 1.5 percent a year.

What this means for residents

• It is still borrowed money. The purchase runs on the EU's SAFE facility, and in August neither ministry would name the interest bill. Tuesday put a rate differential on the record, but still no total cost of credit.
• 325 million is the number to hold them to. A work-share percentage announced at a hearing is a commitment, not a contract clause, and whether it lands with Portuguese payrolls is a question for the Tribunal de Contas (Court of Auditors) later.
• Setúbal district has the most at stake. The Arsenal do Alfeite is the single named industrial beneficiary.

The hearing has at least narrowed the dispute, from whether Portugal overpaid to whether the figures reconcile. The published table, when it arrives, will settle the remaining 95 million.