Wednesday, June 10, 2009

Navy’s sub project slips on time, climbs on cost

Navy’s sub project slips on time, climbs on cost
9 June 2009, Rajat Pandit, TNN, TIMES OF INDIA

NEW DELHI: In a major blow to Navy's already shrinking underwater combat capabilities, the mammoth Rs 18,798 crore project to construct six Scorpene submarines at Mazagon Docks Ltd (MDL) in Mumbai has now slipped around two years behind schedule.

Defence ministry sources say the latest assessment shows the delivery of the first submarine, initially scheduled to roll out by December 2012, would not be possible before end-2014.

Moreover, the entire project is going to be hit with a huge cost escalation, which will take total costs much beyond Rs 20,000 crore, because France is demanding virtually double the money to supply some critical equipment to MDL.

"Negotiations for these `MDL procured material packages', which include almost everything other than combat systems, have been underway for a year now. The French say costs have doubled since the contracts were inked in October 2005,'' said a source.

"Consequently, though submarine hulls are being fabricated in MDL, there is nothing to put inside them at present. MoD has now approached the Cabinet Committee on Security for fresh approval for the cost escalation,'' he added.

The October 2005 contracts with French companies include the Rs 6,135 crore one with M/s Armaris (DCN-Thales joint venture) for transfer of technology, combat systems and construction design, and Rs 1,062 crore with M/s MBDA for sea-skimming Exocet missiles.

A Rs 5,888-crore contract was also signed with MDL for indigenous submarine construction, with another Rs 3,553 crore earmarked for taxes and Rs 2,160 crore towards other items to be acquired during the project.

Navy, on its part, hopes the lost time can be made up to some extent if the approvals come quickly for the Project-75 Scorpene project. All the six submarines were to be initially delivered by December 2017, one per year beginning from 2012.
A big delay will hit Navy hard since its projections show it will be left with only nine out of its present fleet of 16 diesel-electric submarines — 10 Russian Kilo-class, four German HDW and two Foxtrot — by 2012.

As it is, the Foxtrot submarines are obsolete now, and the number could further dip to just five by 2014. This is alarming since both Pakistan and China are rapidly augmenting their underwater combat capabilities.

After inducting three French Agosta-90B submarines, with the last one PNS Hamza even having air-independent propulsion (AIP) to boost its operational capabilities, Pakistan is now looking to acquire three advanced Type-214 AIP-equipped submarines from Germany.

China, of course, is way ahead. It has 62 submarines, with around 10 of them being nuclear-propelled, and at least one Xia-class and two Jin-class being SSBNs (nuclear submarines with long-range ballistic missiles).

Though India has also begun its hunt for six more new-generation submarines under Project-75A, worth over Rs 30,000 crore, it will take "several months'' before even the global tenders (request for proposals) are floated for them.

"Initial information obtained from Russian (Rosoboronexport), French (Armaris) and German (HDW) firms, among others, are being studied at present. We want P-75A submarines to have a high degree of stealth, land-attack capability and AIP,'' said an official.

There is also the indigenous secretive ATV (advanced technology vessel) programme, under which the first of the three nuclear-powered submarines being built is to be "launched into water'' on August 15.

But a fully operational ATV, with SLBM (submarine-launched ballistic missile) capabilities, is at least three years away. Navy, incidentally, will also get the Russian 12,000-tonne Akula-II nuclear-powered attack submarine on a 10-year lease by this year-end.

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