Otokar has agreed to pay nearly TL2 billion in compensation following schedule delays in its major Romanian armoured vehicle procurement contract, one of Türkiye’s largest land systems export projects.
In a disclosure to the Public Disclosure Platform (KAP), the company confirmed that Romania’s state defence procurement firm Romtehnica has initiated a compensation process linked to delays affecting delivery timelines and local production milestones under the COBRA II programme.
The project covers the sale of 1,059 units of 4×4 Light Armoured Tactical Wheeled Vehicles. As previously announced, the first 278 vehicles are planned to be produced at Otokar’s facilities in Türkiye, while the remainder are to be manufactured in Romania. Deliveries were planned to be completed within five years starting from the last quarter of 2025.
According to the company, Romtehnica demanded compensation worth 191,847,899.70 Romanian Lei (approximately TL1.88 billion at current exchange rates), arguing that interim targets related to local production preparations in Romania were not met on time.
Otokar stated that it had filed a lawsuit to annul the compensation claim; however, while reserving its legal rights, it accepted paying the amount on the due date in order to ensure the continuation of negotiations and maintain project continuity.
The company also noted a second compensation claim of 7,295,974.66 Romanian Lei (approximately TL72 million at current exchange rates), tied to the late delivery of 194 vehicles from the first batch manufactured in Türkiye, which is expected to be paid within January, again with rights reserved. TurDef has learnt that remaining vehicles have already reached Romania, ongoing for final acceptance procedure prior to admission.
Otokar stated that the compensation payments are anticipated to be expensed by offsetting revenues from the contract for 2025.
The company’s full statement to KAP is as follows:
“With our company’s disclosures dated October 4, 2024 and November 27, 2024, it was announced that the tender for 4×4 Light Armored Tactical Wheeled Vehicles issued by the Romanian Ministry of National Defense company C.N. Romtehnica S.A. (Romtehnica) was awarded to our Company; a total of 1,059 units of 4×4 Light Armored Tactical Wheeled Vehicles would be sold to Romtechnica, with the first 278 units to be manufactured at Otokar’s facilities, and the remaining to be manufactured in Romania, and that the deliveries are planned to be completed within 5 years starting form the last quarter of 2025.
Romtehnica has submitted a compensation claim for a total of 191,847,899.70 Romanian Lei (approximately 1.880 million TL at current exchange rates) to our Company, alleging the failure to meet the interim targets for local production preparations in a timely manner for the units to be manufactured in Romania. A lawsuit has been filed to annul this claim, and discussions between the parties are ongoing. Yet, our Company shall make the payment regarding the mentioned claim on its due date (today), by reserving its legal rights.
On the other hand, an additional compensation claim for a total of 7,295,974.66 Romanian Lei (approximately 72 million TL at current exchange rates) has been submitted to our Company due to the late delivery of 194 units from the first batch of units to be manufactured at the Otokar facilities, the sale of which was completed and this amount is envisaged to be paid within January by reserving our rights.
It is anticipated that the related payments shall be expensed by offsetting the revenues from the contract for 2025.
While the current delays and disputes may negatively impact the continuation of the project and may lead to additional compensation claims, efforts are underway to resolve the disputes and continue fulfilling our contractual obligations.
Considering that the disclosure of the matters specified in Romtehnica’s payment claims received on December 17, 2025 and December 24, 2025 could harm the legitimate interests of our Company during the discussions to be held between the parties, and that disclosing matters that may be subject to change depending on the outcome of these discussions might mislead investors; it was decided to postpone the disclosure in accordance with the Capital Markets Board’s Material Events Communiqué until the conclusion of the discussions. This disclosure is being made as the conditions for postponement have ceased to exist due to the inability to maintain confidentiality.
Material developments will be disclosed to the public.”
Romania’s order for Cobra II covers 1059 units in the following configurations: APC, APC with RCWS, 120 mm mortar carrier, 81 mm mortar carrier, anti-tank, ambulance, CRBN reconnaissance, and combat engineering vehicle.
TurDef has learned that the legal proceedings fall under the jurisdiction of the Romanian courts.
Otokar’s answers concerning the case are as follows:
Question: What is the current status of the local production preparations in Romania?
Otokar: We are currently ready to commence production in the country, and activities are ongoing in this regard. Beyond ATBTU supplies to the Romanian army, being fully in line with the project requirements, Otokar initiated this project with the strong commitment and objective of ‘establishing a most modern, ‘NATO-standard land platform manufacturing facility in Romania’ and this objective remains as our strongest priority. We are proceeding with great care on our efforts to develop such facility totally in line with NATO requirements in every manner. But also, as well as supplying Romanian Army export to Europe, and make Romania a NATO supplier in land platforms. It is important to highlight that, we have no hesitations whatsoever about fulfilling this commitment. Delays in certain interim targets due to local reasons will not affect the overall timing and objectives of the project at all.
Question: How many vehicles from the first batch were delivered late, and what were the reasons for these delays?
Otokar: Due to certain difficulties, we have encountered in Romania, as of today, the delivery of 194 vehicles have been put into service by the Romanian army. The delivery process for the remaining vehicles is still ongoing since then.
It is important to underline that, small part of the applied penalty is related with the late delivery of the ATBTU. (Light Armoured Tactical Vehicles / Autovehicule Tactice Blindate de Tip Ușor)
Question: Has the payment of penalties affected the overall budget or timeline of the project?
Otokar: No. Production activities are currently ongoing in the country. Beyond delivering ATBTU Romanian army, being fully in line with the project requirements, the first priority of Otokar is to establish a most modern, ‘NATO-standard facility in Romania. We are proceeding with great care on our efforts to develop such facility totally in line with NATO requirements in every manner. Delays in certain interim targets due to local reasons will not affect the overall timing and objectives of the project at all.
Question: What does “activation of the legal mechanisms provided under the contract” mean in practical terms? How does Otokar respond to criticism regarding compliance with contractual deadlines?
Otokar: We are in constant contact with the Ministry of Defence and expressing our reasons by filing our legal objections on the matter.
Having said that, the Ministry’s required payment is made on time, subject to our legal rights on the relevant request, showing Otokar’s unwavering commitment to the project and to Romania. We have no doubt that the Romanian authorities will resolve the matter with diligence and in the most appropriate manner for all parties.
Question: Is there any risk that the project could be suspended, renegotiated, or terminated?
Otokar: In international defence projects, developments of this sort may occur during interim target assessments within the scope of contracts. There are many examples of this around the world.
On our specific matter, we hold continuing discussions with our customer in a spirit of mutual goodwill and understanding. In due course all parties focus on the timely progress of the project. At this time, there is no question of the contract being cancelled.
Author: Özgür Ekşi