Minister of Defense, Mario Banozic, called on the private-owned Brodosplit shipyard on Tuesday "to say whether it can complete coast guard boats for the navy, because otherwise they will be built by another shipyard," state news agency Hina reported.

“It is up to the Brodosplit management to say whether it can finish the ships or not according to the signed contract,” Minister Banozic told reporters in Split where he is participating in a plenary session of the European Coast Guard Function Forum (ECGFF). If Brodosplit cannot complete the ships for the navy another shipyard will do it, he added.

Brodosplit is a major shipyard that was privatized in 2013. In December 2014 they agreed an order with Croatia’s defense ministry for five patrol boats for the national coast guard. However, due to endless delays, only one boat has been delivered so far, the class prototype called OOB Omis, in 2018.

The shipyard, which was bought by the businessman Tomislav Debeljak, and is part of his DIV Group, now has renewed problems with liquidity and is reportedly on the verge of bankruptcy. In addition, they also claim that the ministry owes them 120 million kuna (€16 million). The ministry has denied his claim but also refused to disclose the contracts, saying that they are classified.

“The situation with the construction of coast guard boats has been going on for eight years now, and we want to end that story,” Banozic said on Tuesday. When asked by a reporter whether the job would be given to a domestic or a foreign company in case Brodosplit can’t make it, Banozic avoided answering.

“That’s difficult to say at this moment… First of all, an analysis needs to be made of what has been done so far, and at what stage are the boats now,” he added.

“According to the law, if the company has problems, the patrol boats need to be handed over to authorities, and we will finish them. Certainly, if they cannot finish the ships, it is our right to have them finished elsewhere,” Banozic said.

Brodosplit said that they would need additional 100 million kuna (€13 million) to stave off bankruptcy. Reporters asked whether this meant that the ministry and the shipyard have reached a stalemate.

“It’s not a stalemate. This is a situation that it’s very simple to get out of, based on the law, and contract, and its annexes. If the boats can’t be finished, we’ll move on,” Banozic said. He added that the original contract is classified “because it is a military matter.”