IN Scorpene Submarines - News & Discussions

Scorpene project will cost Rs 2,000cr more - India - NEWS - The Times of India



Scorpene project will cost Rs 2,000cr more



NEW DELHI: India will have to soon shell out well over Rs 2,000 crore more to French armament companies if it does not want its ongoing mammoth Rs
18,798 crore project to construct six Scorpene submarines at Mazagon Docks Ltd (MDL) in Mumbai to come to a grinding halt.

The Scorpene project, under which the first submarine was to roll out by December 2012, with the others following one per year thereafter, is already running two years behind schedule, as was first reported by TOI.

"Our submarine force-levels need to increase...there is no doubt. We have lost a lot of time (in the Scorpene project),'' says Navy chief Admiral Sureesh Mehta.

Admiral Mehta, who retires after 42 years of service on August 31, has reason to be worried. India's underwater combat arm will left with only nine out of its present fleet of 16 diesel-electric submarines -- 10 Russian Kilo-class, four German HDW and two virtually obsolete Foxtrot -- by 2012.

The number will further dip to just five in 2014. This when Pakistan is now looking to induct three advanced Type-214 German submarines, equipped with AIP (air-independent propulsion) to enhance their operational capabilities, after inducting three French Agosta-90B submarines, with the last one PNS Hamza even having AIP.

China, on its part, has a staggering 62 submarines, with around 10 of them being nuclear-propelled, and at least one Xia-class and two Jin-class being SSBNs (nuclear submarines with long-range ballistic missiles).

Sources said the Defence Acquisitions Council, headed by defence minister A K Antony, this month decided to approach the Cabinet Committee on Security to grant approval to the cost escalation of the French `MDL procured material (MPM) packages' from around 400 million Euros to 700 million Euros now.

The negotiations for these MPM packages, which include virtually all major systems connected with sensors, propulsion and the like, apart from the combat systems, have been stuck on the price issue for well over a year now.

"The Scorpene submarine hulls are being fabricated in MDL but there are no systems to put inside them. The French say the earlier price of 400 million Euros for the MPM packages was quoted when the contracts were inked in October 2005 and prices have doubled since then,'' said a source.

The October 2005 contracts with French companies include the Rs 6,135 crore one with M/s Armaris (DCN-Thales joint venture) for transfer of technology, combat systems and construction design, and Rs 1,062 crore with M/s MBDA for sea-skimming Exocet missiles.

A Rs 5,888-crore contract was also signed with MDL for indigenous submarine construction, with another Rs 3,553 crore earmarked for taxes and Rs 2,160 crore towards other items to be acquired during the project.

Incidentally, as reported earlier, the Comptroller and Auditor General in its latest report has blasted the government for taking nine years to finalise the Scorpene deal despite Navy's depleting underwater combat force-levels.

This delay led to increase in the project cost by Rs 2,838 crore. "Moreover, the contractual provisions resulted in undue financial advantage to the vendor of a minimum of Rs 349 crore, besides other unquantifiable benefits,'' said CAG.

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LF, please read the report properly and then give a header to it. 2000crores is 10.6% of 18,800crores not double the amount.

ritesh[/mod]

france has joined the elite club of price hiking along with russia :blum3:,who is next?

French are always double standards,
when we clinched scorpene deal, just next with in a year, they offered Marlin Class subs to PN,
but PN selected type-214, and now they are offering it us,
so better goto Russian subs now, no double standards like French r US,

Tisk Tisk Tisk... why so much anger ???

Don't we have the MMRCA to threaten them with ???

The french know we are stuck with the scorps, the dwindling numbers in submarine force make sure that we can not cancle this tender.

So lets bend over and let'em give to us.

So much for France the friend of India.

EnlightenedMonk said:

Tisk Tisk Tisk... why so much anger ???

Don't we have the MMRCA to threaten them with ???

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i'm not in anger,
but just telling their past records,
they are business minded people, they can do anything for money.

kuku said:

So much for France the friend of India.

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Grow up. Its business. I would have done the same had I been France. Its our media who exaggerates every anti-Indian news in the world. Its plain business.

We sign a deal a decade ago and then expect it remain at the same price. It's like buying a car 20 years ago and still expecting a resale cost at a higher rate than the selling price. Big Joke.

Our Arjun and LCA development have taken 5-15 times cost overruns. Nobody has anything to say about that. But, if the French or Russian escalate costs by 5%/year then everybody sings the "Oh! The are Cheating us" Tune.

We don't have friends. Only Business partners.

Kuku, I am not pointing it to you alone. But, to everyone who thinks that way.

The price escalations with both Gorshkov and Scorpene is our fault alone and no one elses. If our Bureaucrats did their job, we wouldn't be having such problems.

The Scorpene program is already 2 years behind schedule. Do you really believe the French will sit around for 2 years with no earnings? It's all our fault.

p2prada said:

Grow up. Its business. I would have done the same had I been France. Its our media who exaggerates every anti-Indian news in the world. Its plain business.

We sign a deal a decade ago and then expect it remain at the same price. It's like buying a car 20 years ago and still expecting a resale cost at a higher rate than the selling price. Big Joke.

Our Arjun and LCA development have taken 5-15 times cost overruns. Nobody has anything to say about that. But, if the French or Russian escalate costs by 5%/year then everybody sings the "Oh! The are Cheating us" Tune.

We don't have friends. Only Business partners.

Kuku, I am not pointing it to you alone. But, to everyone who thinks that way.

The price escalations with both Gorshkov and Scorpene is our fault alone and no one elses. If our Bureaucrats did their job, we wouldn't be having such problems.

The Scorpene program is already 2 years behind schedule. Do you really believe the French will sit around for 2 years with no earnings? It's all our fault.

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EXACTLY

it should be business no need of crying about all of this (we are your friends) before they get the contract.

And i agree its business, so everytime someone goes on and on about how France or Russia go out of their way to help India.

They should remember there is one reason and one reason alone.

MONEY, in dollars or euros.

And the scorpene project was on schedule, France knew how long it will take when they signed to contract, the delays till now were not equal big enough to increasing the cost to 2000 crore ruppees.

Indian Ministry of Defence should have added a price increase clause in the contract, barring that they left themself open to this, and continue doing so, oh well! thats the great Indian babudom, only the finest IAS candidates and the elected officials are allowed mistakes that big (we all normal people just get fired).

The real delays will happen now, as the government will have to carry out meetings to discuss, negotiate and finally clear the money.

The scorp. project is now, in the delay bin big time.

From what I know. The figure of 18k Crores was worked out sometime in 2002-03 and the contract was inked for the same figure in 2005. The delivery should have begun by 2012. But, MDL had problems absorbing technology, afterall it is a govt owned company. (At the same time L&T was making the ATV hull.)

Now expect the Scorpene to come only in the 2013-14 period....around the same time we will have already commissioned 1 ATV and 2 will be under sea trials. What a bunch of goofs. Headless Chickens.

The price quotation happens as the last phase of a tender, and the prices are not agreed upon till the contracts were signed.

One can observe this in the often changing price quotations for the proposed Mirage 2000 upgrades and the now signed contract for MiG-29 upgrades, the price would only be final once the contracts are signed.

The scorpene submarines were supposed to come out of the line from 2012 before the constructin started in 2007, a delay to 2013 or 14 can hardly be the reason for a significant price increase or indicative of significant troubles in absorbing technology. DCNS press release in 2005 stated 15 years as the expected project completion time (thats 2020).

how can the price be doubled as they dont know that it will take 15 years to complete and fix the price accordingly.Netas corruption is the main source for this doubling and the true story will be different as everyone knows that price keeps changing and the agreement should be clear as whether how much extent price can be increased in the 10 year duration like that

natarajan said:

how can the price be doubled as they dont know that it will take 15 years to complete and fix the price accordingly.Netas corruption is the main source for this doubling and the true story will be different as everyone knows that price keeps changing and the agreement should be clear as whether how much extent price can be increased in the 10 year duration like that

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The AIP system has been doubled from $400mill to $ 800mill for 3 submarines. I think.

kuku said:

The price quotation happens as the last phase of a tender, and the prices are not agreed upon till the contracts were signed.

One can observe this in the often changing price quotations for the proposed Mirage 2000 upgrades and the now signed contract for MiG-29 upgrades, the price would only be final once the contracts are signed.

The scorpene submarines were supposed to come out of the line from 2012 before the constructin started in 2007, a delay to 2013 or 14 can hardly be the reason for a significant price increase or indicative of significant troubles in absorbing technology. DCNS press release in 2005 stated 15 years as the expected project completion time (thats 2020).

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It takes atleast 2 to 3 years to decide upon a price and then sign the contract. The contract is signed based on current market price and the price appreciates every year from 2% to 6%. So, the longer we take to finish the project, the more we have to pay. The appreciation value is reached after intense negotiations. The sellers also have the right to increment the rate of appreciation if there are any delays from our side.

They dont throw the same figures at each other for three years.

There are active negotiations, and the quoted price considers every factor, including price escalations, inflation etc. that can happen, especially in a long term contract.

Sellers have a defined plan, in which they will train the men, help in construction, provide all the equipment required from their side, and the reported reason for the price hike has been the apparent increase in equipment that had to come from france for the contruction.

Delay for 2 years does not account for the reported increase in price, things dont get that expensive in that time frame.

Sounds like a plan to me, get the deal through in 2005 by quoting low prices and then raise the prices for all the equipment to be supplied midway.

p2prada said:

The AIP system has been doubled from $400mill to $ 800mill for 3 submarines. I think.

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Sources said the Defence Acquisitions Council, headed by defence minister A K Antony, this month decided to approach the Cabinet Committee on Security to grant approval to the cost escalation of the French `MDL procured material (MPM) packages' from around 400 million Euros to 700 million Euros now.

The negotiations for these MPM packages, which include virtually all major systems connected with sensors, propulsion and the like, apart from the combat systems, have been stuck on the price issue for well over a year now.

Click to expand...

Scorpene project will cost Rs 2,000cr more - India - NEWS - The Times of India

This has been a hard lesson for the Indian defense establishment, indigenous is the way to go!!!!!!!!!!!!!!!!!!!!!!!

when we can produce nuke subs then why not sub with AIP and vlc

EnlightenedMonk said:

Tisk Tisk Tisk... why so much anger ???

Don't we have the MMRCA to threaten them with ???

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reports had been released a few months ago Rafele was out. Then retracted.

why the heck isn't AIP on all the scorpenes in the first place, now if we're paying so much why don't we get AIP on all of them, instead of just 3. We simply need to allocate more ATV and get around 20 of them in 4 different variants and mean while begin work on next gen big ass boomers for our SLBMs.

kuku said:

They dont throw the same figures at each other for three years.

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Of course not. The price negotiations happen in "real time." But, they start off from an estimate and keep building on that.

Delay for 2 years does not account for the reported increase in price, things dont get that expensive in that time frame.

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Ah! But it always does. A delay always mean the seller can hike prices mid way. That's why the delay must never be from our side.

Sounds like a plan to me, get the deal through in 2005 by quoting low prices and then raise the prices for all the equipment to be supplied midway.

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It was not low either ways. $650mill per sub is expensive.