panel for opening up submarine construction for private sector

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    Mar 13, 2010
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    Panel for opening up submarine construction to private sector-Engineering-Ind'l Goods / Svs-News By Industry-News-The Economic Times on Mobile
    Panel for opening up
    submarine construction to
    private sector
    23 May, 2011, 1037 hrs IST, Dev
    Chatterjee & Sameer Hashmi, ET
    MUMBAI: A committee set up by
    the Prime Minister Manmohan
    Singh to study India's much-
    delayed submarine programme
    has recommended opening up
    construction of submarines to
    the private sector. Each
    submarine costs close to Rs 8,000
    crore to the government
    The committee, led by former
    Chairman of SAIL Dr. V.
    Krishnamurthy, has said that
    private sector investments should
    be invited as public-private
    partnership and as joint ventures
    with the government owned
    The committee has said that with
    private sector setting up capacity
    in the country there is no need
    to import submarines in future
    thus opening up the Rs 50,000
    crore markets for Indian
    companies like L&T and Pipavav
    Shipyard. India at present has 14
    submarines in its fleet.
    L&T, which is constructing a
    shipyard in Ennore in Tamil
    Nadu, and Pipavav Shipyard,
    which has an existing shipyard in
    Gujarat, have been
    recommended by the panel to
    build submarines in partnership
    with government owned
    companies as joint venture
    projects. With this, Pipavav and
    L&T will join a select group of
    four companies that have the
    capability to submarines. "The
    report has been submitted to the
    government last week and an
    announcement is expected
    soon," said a source with direct
    knowledge of the panel's report.
    "If this space is opened up, it will
    be a big opportunity for private
    players. And there is no doubt
    that Indian private players are
    fully equipped to manufacture
    submarines' Nikhil Gandhi. CMD
    of Pipavav told ET NOW.
    It was in 1999, the defence
    ministry had prepared a 30-year
    plan to acquire 24 submarines.
    As per the plan, first six
    submarines were to be delivered
    in 2005 and to be completed by
    2015. The rest of the 18
    Submarines were to be delivered
    between 2015 and 2029.
    The government gave the orders
    for the first six submarines to
    Mazgaon Docks in collaboration
    with French Ministry of Defence
    Yard. But due to lack
    infrastructure, the project has
    met with serious delay. In fact,
    all the submarines will now be
    delivered only by 2022 instead of
    Indian private players have been
    continuosly exploring
    opportunities to enter various
    segments of the Indian defence
    & aerospace sector. Earlier this
    year Tata group formed a joint
    venture with Lockheed Martin to
    make aerostructures for
    Lockheed's C-130 aircraft in
    India. L&T also has a joint
    venture with Cassidian, a division
    of European Aerospace And
    Defence (EADS) Group, for
    defence electronics. It has also
    worked in close cooperation with
    the Defence Research and
    Development Organisation
    (DRDO) on several projects.The
    Mahindra group also has a joint
    venture with UK-based BAE
    Systems for production of
    manufacture mine-proof
    The Indian defence sector would
    need investments of $200 bn to
    $300 bn in military & aerospace
    according to the defence
    ministry.The defence ministry is
    looking at signing offset
    contracts of more than Rs 10,000
    crores in the 11th plan ending
    this year. Twelve offset contracts
    valuing Rs 9,943 crores have
    been signed with Indian private
    industries and defence PSU so
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