Romania’s approval of the €8.33 billion SAFE (Security Action for Europe) programme has triggered continued controversy amid political turmoil, with key defence procurements coming under intensified scrutiny.
At the centre of the debate is the Infantry Fighting Vehicle (IFV) programme—the largest component of the SAFE framework, accounting for roughly one-third of its total value—which continues to raise questions over pricing, localisation, and procurement structure.
Last month, Defence Minister Radu Miruță defended the government’s decision to pursue a SAFE-linked negotiated procurement with Rheinmetall for the IFV programme, presenting it as a cost-efficient, transparent, and industry-boosting initiative.
He stated that the contracts were concluded at prices lower than comparable European programmes and highlighted what he described as strong localisation benefits for Romania’s defence industry.
However, a closer examination of these claims — alongside accounts from government and military sources familiar with the programme — suggests that several key elements related to pricing, procurement volume, and localisation may have been selectively presented and do not fully reflect the underlying contract structure or industrial reality.
Pricing: cutting quantity to cut costs
The government has presented the IFV programme as cost-efficient compared to similar European procurements in countries such as Hungary and Italy.
However, the contract structure points to a different mechanism.
- The number of IFVs financed under SAFE has been reduced from 298 to 232 units.
- The remaining units are expected to be procured through separate funding mechanisms.
This means the lower headline contract value reflects a smaller order, not necessarily a better price.
Sources indicate that unit prices increased by over 10% in early 2026, with adjustments achieved primarily through volume reductions rather than meaningful price concessions.
In effect, the perceived cost advantage appears to be achieved through reduced procurement volume rather than improved pricing terms.
Localisation: inflated claims, lower industrial reality
Localisation has been a central pillar of the government’s messaging, with figures of up to 60% highlighted publicly.
Defence Minister Radu Miruță stated that the IFVs will be produced in Mediaș, where Rheinmetall took over the former Automecanica facility in 2024.
However, according to informed sources and available industrial data, the actual localisation structure may differ significantly from the public narrative.
- Rheinmetall’s proposal is estimated by industry sources at around 35% localisation.
- This falls below the 40% benchmark previously referenced by Romania’s Ministry of Economy (MEDAT).
- Meaningful large-scale production activity in Romania is unlikely before 2029.
In addition, localisation calculations appear to exclude high-value subsystems such as the turret, potentially overstating the actual domestic industrial share and value creation within Romania.
Procurement: negotiated deals without real competition
The government has emphasised that the SAFE programme passed parliamentary approval and followed legal procedures.
However:
- 9 out of 15 SAFE projects were awarded under Negotiated Procedure without Prior Publication (NFPP).
- These procedures remain subject to EU principles of transparency, equal treatment, and efficient use of public funds.
Alternative platforms—including Hanwha Aerospace’s Redback and BAE Systems’ CV90—were not subjected to an open comparative process.
Alternative offers: why was Hanwha’s proposal not considered?
The concentration of SAFE-related contracts within a limited supplier ecosystem has also raised broader questions over how alternative proposals were assessed during the procurement process.
In particular, Hanwha Aerospace’s Redback IFV proposal — portions of which were recently disclosed through Romanian media reports — presented a materially different industrial, operational, and localisation model.
According to a report by Mediafax, Hanwha’s proposal included:
- Full programme delivery: Coverage of Romania’s entire 298-vehicle IFV requirement without reducing quantities or separating future procurement into additional acquisition phases.
- Budget compliance: Total programme value of approximately €2.8 billion, remaining within the €2.9 billion budget framework approved by the Romanian Parliament and the European Commission.
- Maximum localisation: Up to 80% localisation, including domestic production of critical high-value subsystems such as the turret, engine, and transmission through technology transfer and local industrial participation in Romania.
- Earlier domestic production: More than 90% of all vehicles planned to be manufactured in Romania under a phased roadmap beginning from the initial production batches, including 32 locally assembled vehicles in 2028 and full-scale domestic production from 2029.
- Full-spectrum capability: Comprehensive IFV package covering all Romanian Army variants, including command post, reconnaissance, MEDEVAC, TEHEVAC, and 120mm mortar configurations.
- Operational commonality: High platform and subsystem commonality with existing Romanian Army assets such as K9 “Tunet” and the Piranha V turret ecosystem, designed to simplify logistics, maintenance, training, ammunition integration, and long-term sustainment cost.
- Romanian industrial ecosystem: Cooperation framework involving more than 30 Romanian companies across manufacturing, electronics, defense technologies, and supply-chain integration, with plans to connect Romanian suppliers into Hanwha’s broader European and global production network.
- Strategic investment: €1.3 billion in direct investment and technology transfer, with an estimated €14.4 billion long-term economic impact and more than 9,000 jobs projected in Romania.
- Long-Term production allocation: Commitment to allocate production of up to 200 additional ground systems for future global programmes to Romania, supporting sustained industrial utilization and export-oriented manufacturing beyond domestic demand.
- SAFE eligibility: Full compliance with SAFE eligibility requirements through Hanwha Aerospace Romania as an EU-based entity, supported by local establishment, FDI clearance, ongoing industrial investments, and existing Romanian defence programmes including the K9 contract.
The contrast between the competing industrial models has intensified debate within Romania’s defence and industrial community over whether the SAFE-linked procurement process adequately considered broader issues such as long-term industrial sovereignty, localisation depth, operational commonality, and strategic value creation inside Romania.
In a recent Facebook post, General (ret.) Dorin Toma, former commander of NATO’s Multinational Division South-East and former deputy chief of the Romanian Land Forces Staff, criticised the lack of transparency surrounding the SAFE programme.
He noted that “the contracts appear to have been classified, while the only official information available comes from political statements,” adding that such statements “can, at best, be described as lacking technical understanding.”
Toma highlighted that Hanwha’s proposal is based on concrete industrial investments already underway in Romania, including localisation reaching up to 80%.
He further emphasised the operational implications, noting that commonality between systems such as K9, Redback, and Piranha V would simplify logistics, maintenance, and training—reducing lifecycle cost and operational burden.
Supplier concentration: Rheinmetall’s €5.7bn SAFE dominance
The IFV programme is centred on Rheinmetall’s industrial footprint in Romania, including planned production facilities and associated supply chain integration.
However, the concentration extends well beyond a single programme:
- 7 out of 15 SAFE projects are linked to Rheinmetall.
- Approximately 68.3% of total SAFE funding—around €5.7 billion—is allocated to Rheinmetall-related contracts.
This includes not only the IFV programme, but also a broader set of land and naval-related projects tied to the company’s expanding industrial role in Romania.
Such a level of concentration has increasingly fuelled concerns over a de facto single-supplier structure within Romania’s defence modernisation effort.
From an industrial and operational perspective, this concentration creates structural risks, including dependency on a single supplier across multiple capability areas, exposure to external production nodes such as facilities in Hungary, and reduced competitive pressure over cost and innovation.
Andrei Gușă, a Member of Parliament from the Alliance for the Union of Romanians (AUR), alleged that Rheinmetall-linked contracts warrant further investigation, citing “reasonable suspicions” regarding the decision-making process.
He pointed in particular to meetings held between senior government officials and Rheinmetall representatives prior to the SAFE allocation, arguing that the concentration of “almost six billion euros” in contracts raises serious questions over how decisions were reached.
Gușă further stated that these circumstances could justify a broader institutional review, including discussions over lifting parliamentary immunity if evidence of undue influence were to emerge.
