Business

PSU Mazagon Dock Set To Bag $8bn Submarine Project As Private Units Struggle

IANS | 0
4787
| April 26 , 2018 , 15:36 IST

Belying talk of involving the private sector in defence production, the government is all set to award the $8 billion advanced submarine order to the public sector Mazagon Dock Shipbuilders Ltd (MDL) on a "nomination basis".

Well-placed Defence Ministry sources told IANS that an announcement in this regard is expected soon. 

Under what is known as the "Project-75 India" programme, MDL, in collaboration with Naval Group of France, will build six advanced submarines. 

MDL already has a partnership with the French firm under which it is currently building six Scorpene-class submarines - a project worth $3.75-billion.

Under the then Defence Minister Manohar Parrikar, "Project-75 India" was supposed to be rolled out under the Strategic Partnership policy segment of the Defence Procurement Procedure (DPP) of 2016, which would have been a boon for private sector shipbuilders like Larsen & Toubro and Reliance Naval and Engineering.

But with new Defence Minister Nirmala Sitharaman overturning the decision and granting "Project-75 India" to MDL on a "nomination basis", both these companies, already in the red and struggling with almost non-existent order books, will suffer a severe blow.

The decision comes soon after French President Emmanuel Macron's visit to India when he was believed to have pushed for the project with Prime Minister Narendra Modi.

The Request for Information (RFI) document for "Project-75 India" was issued in 2016, and the government received responses from four companies or conglomerates: the French Naval Group, ThyssenKrupp Marine Systems of Germany, SAAB of Sweden, and Rubin Design Bureau-Amur Shipyard, a Russia-Italy collaboration.

In 2017, the Defence Ministry drafted Expressions of Interest (EoI) for private shipyards in India for selection as a strategic partner -- a move that was said to be aimed at creating efficient submarine-building capabilities in the private sector.

The six advanced submarines are equipped with API, or air-independent propulsion, technology and a vertical missile launch system. API allows these submarines to stay underwater for longer periods.