Tuesday, August 31, 2010
Navy torpedoes Indian private shipyards' role in new project
New Delhi : This is the first of a four-part special series on the country’s critical, yet significantly delayed, submarine development programme.
A far-reaching decision by the Ministry of Defence (MoD) will come as a jolt for domestic shipbuilders in the private sector seeking to participate in India’s submarine programme. Top sources in the ministry have told Business Standard that its apex defence acquisition council has decided to exclude Indian private shipyards from the construction of six submarines for the Indian Navy under Project 75I. Instead, the first two submarines will be built at a foreign shipyard.
Project 75I initially envisaged all six submarines to be built in India. The MoD-owned Mazagon Dock Ltd, Mumbai, was to build three; Hindustan Shipyard Ltd — recently acquired by the MoD from the Ministry of Shipping — would build one; while Indian private sector shipyards L&T and Pipavav would compete to build two. But the navy’s insistence on having the first two submarines built abroad has torpedoed the private sector shipbuilders out of the picture.
The navy’s decision, explained a senior admiral on condition of anonymity, stems from delays that have been endemic to indigenous submarine construction. India bought four HDW submarines in the 1980s. HDW’s shipyard in Germany built two of them in just 56 months each. In contrast, Mazagon Dock took 98 months and 116 months to build the remaining two. Mazagon Dock is also running 30 months late in delivering the first of six Scorpene submarines that it was contracted to build under Project 75.
“At least two submarines will come in quickly by building them abroad,” said the admiral. “We are desperately short of submarines.” A performance audit of the navy by the Comptroller and Auditor General has documented that just seven or eight of India’s 15 submarines are operational at any given time against a projected requirement of at least 24.
Yet, curiously, despite the dismal track record of Mazagon Dock, the defence acquisition council has decided to hand it a prime role in Project 75I as well. While the cost of Project 75I is still not known, it will substantially exceed the Rs 23,562 crores that India paid French companies Armaris and DCNS for Project 75, since building two submarines abroad will inflate the cost.
Furthermore, that decision will require fresh sanction from the Cabinet Committee on Security — typically involving a 12-24-month delay — since the current sanction mandates that all the submarines must be built in India.
Only after that will a tender be issued to identify a foreign technology partner. Among the possible bidders for the contract are Russia’s Amur Shipbuilding Plant, Germany’s HDW, Spain’s Navantia, Italy’s Fincantieri, and France’s DCNS.
In 1999, the Cabinet Committee on Security approved a 30-year plan for 24 conventional submarines to be constructed in India. This sanctioned two simultaneous construction lines: six using western technology; and six based on Russian knowhow. After that, 12 indigenously-designed submarines were to be built.
The navy believes that Russian submarines have greater endurance, firepower and strategic utility, while western submarines are stealthier and, therefore, harder to detect. It was reasoned that Indian designers would adopt the best of both traditions when designing the 12 indigenous submarines.
Private companies such as L&T and Pipavav have invested thousands of crores of rupees to build world-class shipyards, and have lobbied intensely for a share of the submarine programme. Over the last decade, L&T has played a central role in building and outfitting the nuclear-powered INS Arihant, and will do so for its two successor vessels.
Senior L&T officials have argued that Mazagon Dock would have its hands full with Scorpene production until at least 2019 and has no capacity to take on another three submarines. But the MoD has presented a detailed plan for the shipyard to set up a second submarine line.