State-owned MDL, HSL and private sector L&T, Reliance also in the fray; South Korean Daewoo among OEMs invited to compete as technology partner. Vishal Thapar reports...
The government-owned Mazagon Dock Limited (MDL) and the Gujarat-based Adani group are among the five Indian entities which have bid for selection as Strategic Partner to build six attack submarines in collaboration with a foreign original equipment manufacturer (OEM) under a $6.3 billion Indian Navy programme, Project 75(I).
Others to have submitted an Expression of Interest (EoI), opened on September 7, include Larsen & Toubro, Reliance Naval & Engineering Ltd and another Governmentowned shipyard, Hindustan Shipyard Limited (HSL). Under this programme, all six submarines are to be built in India.
The Ministry of Defence (MoD) is also learnt to have issued parallel EoI by invitation to Russia’s Rosbornexport, France’s Naval Group, Sweden’s Kockums, Spain’s Navantia, Germany’s Thyssenkrupp and South Korea’s Daewoo Shipbuilding and Marine Engineering. The last date for these OEMs to submit their response is September 24, 2019.
Although the Strategic Partnership (SP) Model, as enunciated under Chapter 7 of the Defence Procurement Procedure (DPP) 2016, was meant to build up defence production capability in the private sector, bids by defence PSUs in both the programmes (the other being the acquisition of 111 naval utility helicopters) launched under this procurement model suggest that the concept has been diluted by MoD to allow the public sector to be considered in the SP programmes.
So, while the EoI by both the Mumbaibased MDL and the Vizag-based HSL is along expected lines, the surprise packet is the bid by the Adani Group, which is not known to have any ship-building capability so far. Adani is a recent entrant into the defence production sector, and is set to compete in all major ‘Make in India’ projects under the SP Model – multi-role fighter aircraft, naval utility helicopters and Project 75(I) submarines.
MDL is the only Indian shipyard so far to have license-produced conventional submarines – 2 HDW Shishumar class Type 209s in the 1990s and currently delivering on the ongoing programme to build six Kalvari class Scorpene submarines. HSL has undertaken a mid-life upgrade for a Kilo class submarine.
Amongst private sector companies, L&T is known to have a competence in submersibles, and widely reported to have made a significant contribution in building the hulls for India’s Arihant class nuclear-powered, ballistic missile firing submarines (SSBNs). Reliance Naval owns the Pipavav shipyard, which received an order for building five offshore patrol vessels (OPVs) for the Indian Navy but has not been able to deliver on time.
Informed sources reckon that for the Adani bid to pass muster as a rank outsider without a shipyard of its own, it would have to tie up with an existing external shipyard. Observers reason that such a tie up could be possible with ether Reliance Naval & Engineering Ltd for its Pipavav Shipyard or HSL. While Reliance-Pipavav, which is under the National Company Law Tribunal (NCLT) process, could find it challenging to pass through the financial gates on its own in the evaluation process, HSL’s stand-alone bid could be weak as compared to the frontrunner, MDL. A combination of the Adani’s financial heft with the technical capabilities of either of these shipyards could qualify as a legitimate bid, observers deduce.
The Ministry of Defence is also learnt to have issued parallel EoI by invitation to Russia’s Rosbornexport, France’s Naval Group, Sweden’s Kockums, Spain’s Navantia, Germany’s ThyssenKrupp and South Korea’s Daewoo Shipbuilding and Marine Engineering. The last date for these OEMs to submit their response is September 24
“Following the receipt of Interest from these five Indian companies, the Indian Navy will conduct visits to their facilities and do a financial evaluation for assessing their capability to be Strategic Partner according to laid down guidelines,” an informed source told this reporter.
SP’s has reported earlier that the Indian companies would be shortlisted based on their capability for integration of system of systems, expertise in shipbuilding domain and the financial strength. The OEMs would be shortlisted primarily based on their submarine design meeting the Indian Navy’s qualitative requirements and qualifying the transfer of technology (ToT) and indigenous content criteria.
Parallel selection processes will be undertaken to shortlist Indian contenders for Strategic Partner and foreign OEMs who meet the requirements. The shortlisted Indian companies will have to submit bids in partnership with any of the shortlisted OEMs to compete for the order to build six submarines. The order is expected to have a follow-on option to build six additional submarines.
The RFP will be issued to the shortlisted Indian companies. An Indian company can submit only one bid in partnership with only one OEM while the foreign OEMs will be allowed to tie up with more than one Indian partner.
The acquisition of six submarines under Project 75(I) was approved by the Defence Acquisition Council on January 31 this year. This was followed by an invitation to Indian companies for Expression of Interest on June 20. The EoI to select OEMs followed shortly thereafter.
“Project 75(I) is intended to build up conventional submarine building capability in India to a level that it will be able to design and construct submarines on its own thereafter,” a senior Navy official said.
The selected SP in collaboration with its OEM partner will be mandated to set up a dedicated submarine manufacturing line. The programme is intended to make India a global hub for submarine design and production. The project would not only aid in boosting the core submarine industry but would also greatly enhance manufacturing, especially in the MSMEs by development of an industrial ecosystem.