panel for opening up submarine construction for private sector

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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
Now
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
exchequer.
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
companies.
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
2015.
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
vehicles.
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
far.
 
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