L&T to face-off with MDL and HSL in $6.3 B Indian Navy submarine competition

Adani, Reliance fail to make the shortlist; 5 foreign OEMs in the reckoning as technology providers

January 21, 2020 By Vishal Thapar Photo(s): By Indian Navy
Under Project 75(I),the Indian Navy is seeking Air Independent Propulsion (AIP)-equipped submarines with a potent land attack capability

India's highest military procurements body, the Defence Acquisition Council (DAC) on January 21 approved a 3-way competition among the private sector L&T's Katupalli shipyard and the public sector Mazagon Dock Limited and Hindustan Shipyard for the $6.3 Billion Indian Navy programme to build 6 new diesel-electric submarines under Project 75 (India).

"The DAC approved shortlisting of Indian Strategic Partners (SP) and the potential Original Equipment Manufacturers (OEMs) that would collaborate with SPs to construct six conventional submarines in India," the Ministry of Defence announced in a statement.

The five foreign OEMs on the shortlist are Navantia of Spain for the S-80 (Issac Peral class) submarine, Thyssenkrupp Marine Systems of Germany for the Type 214, Rosboronexport of Russia for the Amur, Naval Group of France for a larger version of the Scorpene submarine and Daewoo Shipbuilding & Marine Engineering of South Korea for the KSS-3

The five foreign OEMs on the shortlist are Navantia of Spain for the S-80 (Issac Peral class) submarine, Thyssenkrupp Marine Systems of Germany for the Type 214, Rosboronexport of Russia for the Amur, Naval Group of France for a larger version of the Scorpene submarine and Daewoo Shipbuilding & Marine Engineering of South Korea for the KSS-3.

SP's Naval Forces had earlier exclusively reported that Saab of Sweden had pulled out of the competition. It was the only one of the six OEMs which did not respond to an invitation to compete.

Under the SP process, each of the shortlisted Indian shipyards will be required to submit bids in partnership with an OEM, which will provide deep transfer of technology to build the submarines.

The Adani-HSL bid was reportedly rejected by the Indian Navy on the grounds that there was no prior JV, as required under the terms of the Expression of Interest (EoI), at the time of submitting a response to the EoI. It also appears to have been pointed out that there was no Government approval for the public sector HSL to tie-up with Adani. The Reliance bid reportedly could not pass the financial prerequisites

There were five Indian responses to an Expression of Interest issued by the Indian Navy in 2019, competing to be on the shortlist for Strategic Partner hopefuls. Those who entered the competition were Mazagon Dock Limited (Mumbai), Larsen & Toubro (Katupalli shipyard), Reliance Naval & Engineering Ltd (Pipavav shipyard) and HSL (Vizag), on its own as well as in partnership with the Adani Group.

The Adani-HSL bid was the surprise packet. Adani does not own a shipyard, which was a necessity to bid for the competition. It hoped to be considered in partnership with the Ministry of Defence-owned HSL. The Adani-HSL bid was reported first by SP's Naval Forces. ( http://www.spsnavalforces.com/news/?id=229&h=Adani-makes-surprise-bid-in-$6.3-B-Indian-Navy-programme-to-build-6-submarines-under-Project-75I )

The Adani-HSL bid was reportedly rejected by the Indian Navy on the grounds that there was no prior JV, as required under the terms of the Expression of Interest (EoI), at the time of submitting a response to the EoI. It also appears to have been pointed out that there was no Government approval for the public sector HSL to tie-up with Adani.

The DAC also accorded approval for inclusion of Innovations for Defence Excellence (iDEX) in Defence Procurement Procedure. This would provide avenues in capital procurement for the Armed Forces to startups and innovators working for iDEX and provide huge fillip to their budding efforts

The Reliance bid reportedly could not pass the financial prerequisites.

Under Project 75 (I), the Indian Navy is seeking an Air Independent Propulsion (AIP) submarine for greater underwater endurance, and a more potent land attack capability with longer-range missiles than those available on its Scorpene (Kalvari) class submarines.

Project 75(I) is the second programme under the SP Model. The first is the $3 Billion acquisition of 111 Naval Utility Helicopters.

The DAC meeting chaired by Defence Minister Rajnath Singh was the first meeting of 2020 and after the appointment of India's first Chief of the Defence Staff, who will now play a big role in determining procurement priorities.

To promote indigenisation, the DAC accorded approval for procurement of equipment worth over Rs 5,100 crore from indigenous sources. These include sophisticated Electronic Warfare Systems for the Army designed by Defence Research and Development Organisation (DRDO) and manufactured locally by the Indian industry. These systems will be used in deserts and plains and will provide comprehensive Electronic Support and Counter Measure capabilities to the field formations in both communication and other aspects of Electronic Warfare.

The DAC also approved prototype testing of trawl assemblies designed by DRDO for T-72 and T-90 tanks providing an important indigenous de-mining capability to the Army.

The DAC also accorded approval for inclusion of Innovations for Defence Excellence (iDEX) in Defence Procurement Procedure. This would provide avenues in capital procurement for the Armed Forces to startups and innovators working for iDEX and provide huge fillip to their budding efforts.