Portugal is expected to buy two submarines from a German company after the two sides signed an agreement at a Portuguese naval base Wednesday, the Portuguese press reported.

The budget for the two submarines was set at 800 million euros (about 1 billion US dollars) and the purchase is part of a renovation program of the Portuguese navy, that is scheduled to end in 2012.

The Portuguese government, in a decision passed by the Ministers Council last September, considered that the German consortium DHW presented the best bid in terms of price, compensation and operation conditions, when compared to those of the French DCNI company.

The French firm had tried to oppose the decision, arguing the purchase violated the concurrence rules. But the Portuguese supreme administrative tribunal rejected the appeal and ruled the German group offered better compensations for local navy and industry, despite higher prices.

Source: Xinhua