Slew of shipbuilding RFPs after decision on qualifying criteria for bidders
A $2 Billion tender for 6 Next Generation Missile Vessels (NGMVs) under the Buy and Make (Indian) category was among 4 Naval and Coast Guard RFPs issued by the Ministry of Defence (MoD) on July 1 to stimulate Indian shipyards. More tenders are in the offing.
The NGMV is a futuristic, stealth missile corvette with a land-attack capability, and the RFP for its construction has been issued to all 7 major Indian shipyards. These include the 4 government-owned defence shipyards and the public sector Cochin Shipyard, besides L&T and Reliance from the private sector.
The NGMV will be a follow-on to the Kora class in the 2,000 - 2,500 ton category with a range of 2,800 nm and speed of 25-35 knots. The specifications stated in the RFI released in 2015 suggest that these warships will carry 8 surface-to-surface missiles, a full-fledged Surface-to-Air Missile system with point defence capabilities and a 15 km range MR gun system as part of the weapons package.
In addition, tenders for 8 Fast Patrol Vessels (FPV), 12 Air Cushioned Vehicles (ACVs) and 8 Missile-cum-Ammunition Barges have been issued to smaller "shortlisted shipyards". The cumulative value of all 4 tenders has been stated as 15,000 Crore ($2.2 Billion). The RFP for ACVs also includes the initial requirement of the Indian Army for 6 such vehicles
In addition, tenders for 8 Fast Patrol Vessels (FPV), 12 Air Cushioned Vehicles (ACVs) and 8 Missile-cum-Ammunition Barges have been issued to smaller "shortlisted shipyards". The cumulative value of all 4 tenders has been stated as 15,000 Crore ($2.2 Billion). The RFP for ACVs also includes the initial requirement of the Indian Army for 6 such vehicles.
Of this, the lion's share is of the NGMVs, which alone account for 13,500 Crore ($2 Billion), as was approved by the Defence Acquisition Council in 2016. While this project is running three years behind schedule, its tender comes amidst a flurry of military procurement decisions by the Modi Government after being re-elected to office in May, suggesting that quicker decision making is in the offing.
The MoD in its statement appeared to attribute the delay to a decision on fixing the minimum qualifying criteria for private shipyards to be invited for bidding. Some of the private shipyards have in the past failed to deliver after being awarded orders. The issue of evaluating the fitness of shipyards has now been resolved, the MoD indicated.
"In addition to the above, a few more RFPs for more shipbuilding projects are likely to be issued in the next few months," the MoD stated
"Rationalisation of guidelines for capacity assessment of shipyards that have been promulgated recently. Rationalisation and promulgation of financial selection criteria have paved the way for issue of RFPs for a large number of shipbuilding projects that have been pending," it was stated in the press release. The promulgation of guidelines setting qualifying criteria for shipyards follows an exercise by the Ministry along with Indian Navy and Coast Guard to make the process more objective and transparent.
"In addition to the above, a few more RFPs for more shipbuilding projects are likely to be issued in the next few months," the MoD stated.
A move is afoot to reserve some orders for smaller shipyards in order to promote expansion of ship-building capability. "Further, in a significant move to encourage smaller shipyards, participation in the projects with the anticipated annual outflow of less than 75 Crore ($10.88 Million) has been restricted to smaller shipyards having an average annual turnover less than 500 Crore ($72.5 Million). It appears that the FPVs and AVCs will be reserved for this category of smaller shipyards.
"Considering the need for absorbing the relevant design and construction technology for building these craft (ACVs) in India at affordable cost, a feature to encourage joint development of design by Indian Shipyards in collaboration with a foreign design house of ACVs or by sourcing the design for construction of ACVs with substantial Indian content has been included in the RFP for ACV," it was declared in the statement.