CAG raps Navy for delay in refit of submarine

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  1. pmaitra

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    CAG raps Navy for delay in refit of submarine

    The medium refit of INS Sindhukirti, a Russian submarine in Indian naval fleet, was originally scheduled to be over by 2004. However, it was completed only in 2015, with the submarine unavailable for operations for a decade, even as the refit cost shot up by over Rs 450 crore, the Comptroller and Auditor General of India (CAG) has found.

    Indian Navy acquired 10 EKM submarines from Russia between 1986 and 2000. The medium refit of six of them was given out to Russia because of lack of capabilities and spares in India.

    The first medium refit of an EKM submarine was started in Visakhapatnam naval dockyard in July 1999. As the government decided to develop further capability outside of the naval dockyard, it decided to award the medium refit contract to Hindustan Shipyard Ltd in Visakhapatnam in June 2005.

    The CAG found that the medium refit-cum-upgradation of INS Sindhukirti was to commence by 2001 and complete by 2004. However, it was actually carried out from 2006 after “the submarine witnessed extensive deterioration.”

    “Though the development of indigenous repair capability was envisioned in 2000 and the sanction for the first MR of submarine at an indigenous commercial yard was accorded in June 2002, yet the contract for the MR was concluded only in October 2005,” the audit found.

    Against the original schedule of completing the refit by January 2009, the submarine was delivered to the Navy only in June 2015. Sea acceptance trials went on for months from then on, and a few weeks ago the submarine was back in full service with the Navy.

    The audit, tabled in Parliament on Tuesday, found that the cost of refit increased from the original proposed Rs 629.50 crore to Rs 990.52 crore by August 2013, with additional liabilities of Rs 92.17 crore still being claimed as of September 2015. Thus, the Navy ended up paying Rs 453.19 crore for the refit.

    It was not just the financial losses, but the adverse impact on the operational capabilities of the Navy, which already has a severe shortage of submarines. “The Navy was unable to operate one of its EKM submarines since June 2004 and was deprived of one of its conventional platforms for more than 10 years,” the audit pointed out.

    Against a stipulated minimum strength of 24 submarines, India has just 14 of them in service. Of them less than 10 are operational at any given point of time.

    18 months delay and Rs 20.80 crore wastage

    The CAG audit has found that the Ministry of Defence incurred an additional cost of Rs 20.80 crore and a delay of 18 months in the conversion of INS Sujata into a cadet training ship because of a mix-up.

    In February 2009, when the bids were submitted, ABG Shipyard Ltd., one of the private parties that took part in the bid, had suggested that WISL (Western India Shipyard Ltd.) would be carrying out the work on its behalf. “The quote of M/S WISL was accepted by the Ministry with the understanding that M/S WISL was a part of M/S ABG as a merged entity,” the audit said. Later, it turned out that the merger was sub judice before the Bombay High Court. By then WISL was accepted as the lowest bidder, and the government decided to retender the entire process.

    “Improper assumption by Navy in considering M/S WISL to be a merged entity of M/S ABG and later rejecting the bid instead of considering the bid of M/S WISL as an unsolicited bid, as stipulated in DPM (defence procurement manual), not only led to a delay of 18 months in conclusion of the contract, but also an avoidable expenditure of Rs 20.80 crore,” the audit pointed out.


    __________________________

    A lot of Indian private companies have the tendency to sign contracts and then outsource them to another company. These are not companies, rather, middlemen, brokers, or dalaals. In this case, ABG Shipyard Ltd withholding the sub-judice status and bidding should be treated as an offense. The audit blames the Navy for improper assumption. How is the Navy supposed to know about the sub-judice status? Perhaps the Navy should hire astrologers now?
     
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