The Uruguayan government recently confirmed that the Spanish shipyard Cardama has agreed to cancel the construction contract for two offshore patrol vessels (OPVs) and has not appealed this administrative decision.

“The shipyard’s failure to appeal the Uruguayan government’s administrative decision to terminate the contract means the termination is officially in effect. Since the shipyard has not filed an appeal, the administrative court will not hear the case. The next phase involves the follow-up procedures for contract termination, namely compensation for damages,” confirmed Jorge Díaz, Secretary to the President of Uruguay.

The contract, signed in 2023 with a total value of approximately $90 million, was originally scheduled for delivery in 2025. To date, Uruguay has paid approximately $30 million.

In October 2025, the new government led by President Yamandú Orsi decided to terminate the contract, citing breaches of the performance guarantee.

The Uruguayan government stated: “While attempting to enforce the guarantee, the government discovered serious violations, including the alleged invalidity of relevant documents issued by European Trading Co., Ltd.”

These breaches have triggered administrative investigations and criminal proceedings.

In February 2026, Yamandú Orsi made it clear that the decision to terminate the contract would not be reversed, and that the government would recover public funds and hold those responsible to account.

As the Cardama Shipyard did not file an objection, the administrative proceedings in this case have now concluded, and the matter has entered the financial and legal accountability phase.

This contract cancellation is one of the most sensitive defense issues following the change of government in Uruguay, involving both substantial funds and the urgent need to modernize naval equipment.

Currently, Uruguay is exploring feasible options for acquiring replacement vessels from other countries.