Germany Scraps Warship Project, Loses Rp46 Trillion Before Completion

The German government has cancelled its largest warship project since World War II after pouring around €2.3 billion, equivalent to Rp46.9 trillion, into the programme. The new-generation F126 frigates, which were the mainstay of the programme, have not yet been fully built. Berlin’s decision immediately shook the market. Shares in defence company Rheinmetall plunged by as much as 13 percent after the government halted the programme for six F126 frigates, which had been projected to become a backbone of German naval power. Der Spiegel magazine reported that the multi-billion-euro project was cancelled due to prolonged delays, technical risks, and the potential for increasingly large cost overruns. The German Ministry of Defence assessed that continuing the project would cause the budget burden to swell far beyond the initial plan. According to a Die Welt report citing the Ministry of Defence, the F126 programme had absorbed around €2.3 billion before being terminated. The funds were used for ship design, software development, construction work, and payments to various contractors involved in the project. Adding to Berlin’s concern, the total programme cost was estimated to potentially soar to more than €18 billion, or around Rp367 trillion. This figure is far above the initial project value, which was estimated at around €10 billion for six frigates. Instead of continuing with the F126, Defence Minister Boris Pistorius chose to shift focus to smaller frigates. The government now plans to increase its order for MEKO A-200 class frigates from TKMS, continuing a contract for four ships approved in March 2026. The decision proved beneficial for TKMS, whose shares surged by about 10 percent in early trading as the market saw opportunities for new contracts from the German government. The F126 programme itself has a long history. The project was first initiated when Ursula von der Leyen was still serving as German Defence Minister. The giant warship was designed to be approximately 166 metres long with a displacement of 10,500 tonnes, making it one of the largest frigates ever planned in Europe. However, various obstacles caused the project schedule to continually slip. The German shipyard Lürssen Naval Vessels, which was later acquired by Rheinmetall in March 2026, was eventually appointed to take over management of the troubled project. Meanwhile, the MEKO A-200 frigate now chosen by Berlin is much smaller, with a length of about 120 metres and a displacement of around 4,200 tonnes. Nevertheless, senior German Navy officials reportedly support Pistorius’s move to revise the warship programme.