MoD to decide the fate of Project 75 (I) based on the Strategic Partnership Model

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New Delhi | Updated: January 16, 2020 5:32:37 PM

Under the SP model, the Project 75I is the second one to be processed, and submarines for the Indian Navy will be built-in India through technology transfer.

indian navy, Project 75 I, Strategic Partnership Model, Ministry of Defence, Strategic Partnership, SP modelThere have been extensive discussions on the public sector versus the private sector when it comes to the defence programs.

The Project-75(I) is one of the most important and strategically significant naval programmes being undertaken by the Ministry of Defence (MoD) in the new decade. It is in line with the government’s Strategic Partnership (SP) Model and has broad-based the competition which is fair in a high-value project. Under the SP model, the Project 75I is the second one to be processed, and submarines for the Indian Navy will be built-in India through technology transfer.

According to the MoD, the SP model is being adopted in an effort to ensure building capacity in Indian Industry which in turn, will help in the local manufacture of major military platforms.

Hindustan Shipyard Ltd, (HSL) after achieving success in Submarine repairs by reaching the final stages of completion of INS Sindhuvir is now making a foray into Submarine construction. Accordingly, HSL and Adani group together have submitted their response to the Expression of Interest (EoI) issued by Ministry of Defence (MoD) in Jun 2019 for construction of six conventional submarines — P 75 (I) for the Indian Navy at a cost of Rs 45,000 crore.

Speaking on condition of anonymity, a senior officer said, “The programme shall enable the transfer of critical technology for building the modern conventional submarines and offers to be a potential game-changer for any Indian Shipyard which shall finally, win the contract. It effectively offers a once in a lifetime opportunity to build submarines for the Indian Navy and contribute to nation-building.”

“It is only a matter of time before a nod is given by the Ministry of Defence (MoD) to the strategic partnership (SP) of HSL-Adani Group to bid for constructing six conventional submarines — P 75 (I). The ball remains in the court of MoD,” said the official quoted above.

In an earlier interaction with Financial Express Online, Rear Admiral LV Sarat Babu, C&MD, HSL had said that “If HSL and Adani combine win this bid; it will enable the development of Visakhapatnam and its local industry into a major defence industrial hub in the country.”

What is the Adani – HSL partnership?

It combines the Financial & Technical (System of Systems) capabilities of Adani Group, and the Submarine Specific capabilities and prior experience of Submarine refits of HSL, to provide the best possible solution to the Indian Navy towards P-75(I).

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There have been extensive discussions on the public sector versus the private sector when it comes to the defence programs. “However, it is imperative that a collaborative model under the public-private partnership is being explored by the MoD to bring the excellent infrastructure of DPSU along with execution the efficiency of the private sector to the fore. A PPP model approach offers better reliability, as the resources required for project execution, is with HSL and the Adani Group is providing strong financial support as well as the speed of execution, ensuring timely and within cost completion of Programme,” said the officer quoted above.

As it is a strategic ‘Make in India’ project and with five foreign OEMs, India has to extend into a wider set of potential Indian Strategic partners to leverage the maximum cost and time advantages.

“Both HSL and Adani combined response to EoI is as per teaming arrangements prescribed in DPP 16, and hence it is logical and in the interest of the country that all three companies are issued RFP and proceed with the selection of any of the five OEMs already shortlisted by MoD, so that the best and most competitive shipyard/team wins the tender under Make in India,” said a senior officer.

Apart from Adani –HSL JV, the other two bidders are M/s MDL and L&T.

Both have their own advantages and disadvantages with respect to experience, execution time, infrastructure and capacity. In contrast, the PPP model of Adani and HSL aims to synergise the advantages and strengths of private and public industries whilst discarding the disadvantages of both. This potent combination brings with it every pre-requisite and strength to ensure completion of this strategic project without any time and cost overruns.

Who all responded to the EoI?

South Korean company Daewoo Shipbuilding & Marine Engineering has pitched KSS-3 submarine.

The Naval Group of France which is already involved in the `Scorpene’ submarine under Project-75.

Navantia of Spain has offered S-80 (Issac Peral class).

TKMS of Germany — Type 218 (Invincible Class).

Rosboronexport of Russia — Amur.

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