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HSL-Adani bid for mega Rs 45,000 crore submarine project rejected, MDL & L&T get go ahead

As reported by ET, a tussle had emerged over the P 75I project after the Navy’s empowered committee refrained from going ahead with the HSL-Adani public-private bid while the defence production ministry had emphasised that such teaming arrangements should be considered.

, ET Bureau|
Last Updated: Jan 22, 2020, 10.53 AM IST
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India wants to produce six submarines domestically with a foreign technology partner under the P75 project. The contract is being processed under the ‘strategic partnership model’.
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NEW DELHI: Rajnath Singh-led defence ministry has taken the call to go ahead with its `45,000 crore procurement plan for submarines with two Indian competitors, the state-owned Mazagaon Docks Limited and private sector giant Larsen and Toubro, thereby rejecting a third bid put up by Adani Defence and Hindustan Shipyard Limited.

The decision, taken after differences over the inclusion of the HSL-Adani bid, clears the way ahead for the biggest ‘Make in India’ project for the defence sector. As reported by ET, a tussle had emerged over the P 75I project after the Navy’s empowered committee refrained from going ahead with the HSL-Adani public-private bid while the defence production ministry had emphasised that such teaming arrangements should be considered. Taking the matter head on, the Defence Acquisition Council decided to move on with the recommendations of the empowered committee to shortlist L&T and MDL, both of which have considerable experience in warship building. As reported, the HSL-Adani bid was rejected on the ground that clearances were not in place for the formulation of the joint venture that responded to the Navy’s expression of interest. A fourth bid put in by Reliance Naval and Engineering Limited had been rejected on financial parameters.

Submarine

The two Indian competitors will now move on to the next step of joint bids with foreign technology collaborators, which would be evaluated on technical and commercial parameters. All five foreign technology collaborators who applied – from Russia, France, Germany, Spain and South Korea - have been cleared to take part in the competition. While technically, all five foreign technology collaborators have an equal chance of forming a winning partnership with the Indian company, the contest is expected to be a straight face off between the French Naval Group and Russia’s Rubin Design Bureau.

Sources have told ET that while options may still be open, MDL is likely to go ahead with the Naval Group, given the current partnership for the Scorpene submarine program.

The MDL-Naval Group combine would have a pricing advantage, given that significant infrastructure and adequate manpower is already at place at the Indian yard which is currently producing the Scorpenes.

Aformidable challenge will arise from L&T that has emerged as India’s top defence company and has played a major role in the Arihant nuclear submarine project.

The private sector group has a ship lift in place that enables speedier construction of boats. ET has learnt that advanced discussions have been carried out with the Russian side and a joint bid is likely with L&T.

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