The plan envisages the construction of 24 submarines indigenously along with public and private industries, of appropriate designs in two phases.
By Joseph P Chacko
Indian Navy P-75 1 submarine project is listed in Phase I of the Indian Navy’s 30 Year indigenous submarine construction plan approved by the Cabinet Committee on Security (CCS) on 13 Jul 1999. The plan envisages the construction of 24 submarines indigenously along with public and private industries, of appropriate designs in two phases. In Phase I (2000 – 2015), the plan had two parts. The first part is the construction of P 75, and it is currently being built. But the second part, Project 75(I), six submarines from the Eastern design like the 877EKM or a derivative like Amur 1650, was to be constructed simultaneously.
The objective was to absorb the best technologies from the east and west and design and build the next twelve submarines of purely indigenous design in Phase II- 2016-2030. Two diverse sources would have enabled mitigate political arm twisting and sanctions in the future.
In line with the objective, India began negotiations with M/S Rosoboronexport (ROE) for the Amur 1650 design. The design was to be suited to the Indian Navy’s requirements. Other conditions include the Transfer of Technology (Design and Build), completed by Dec 2001 in either MDL or Larsen & Toubro (L&T, at their facilities at Hazira).
Request for Proposal (RFP)
The Indian Navy created a formal RFP to Rosoboronexport and an internal Naval Head Quarter (NHQ) committee’s report that recommended a suitable yard for building the boats. But the 2004 elections set in, and the government changed, leading to a project freeze for an unknown reason.
The Project 75(I) Submarines
The P 75 I submarine was envisaged for the primary role of land attack with submarine-launched cruise missiles (LACM). The Russian 3m-14E Klub land attack missile was already being fitted into the Kilo class since the beginning of the modernisation of INS Sindhughosh.
But a new requirement was inserted by the introduction of the Air Independent Propulsion System (AIP). By 2006-07, the Naval Qualitative Staff Requirement (NSQR) was altered to include AIPs, preferably with fuel cells, which only the Germans had at the time. I have an argument against AIP’s which will be a subject for another time.
Stalled RFP. The LACM was only with Russia (and the US) and the prescribed AIP only with Germany. An even playing field could not be created even to-date between the east and west.
Since the ‘Eastern’ design for submarines got diluted to include a Western-oriented design like a Type 214 with AIP, a new CCS sanction was required.
The 1999 plan required a relook, and the P-75 I Project now includes an upgraded design to meet the strategic and tactical requirements platform to serve till the middle of this century. Another iteration in the 30 year plan in Phase II is the reduction of 6 conventional submarines. In the latter half of 2018, the CCS approved the indigenous construction of six SSN (Nuclear powered attack) submarines. So only 18 conventional submarines are to be built out of the 24 budgeted in the 30 Year plan.
Strategic Partner Initiative (SPI)
The P 75I plan got further delayed with the introduction of the Strategic Partner (SP) from the private sector in order to encourage their participation in the ‘Make in India’ policy.
After four years of fulminations and deliberations, the Defence Acquisition Council (DAC) shortlisted two potential builders, MDL and L&T, as Strategic Partners for P 75 (I). How is this different from the 2002-03 scenario when only these two were in contention?
Design Collaboration Contenders. Five potential design collaborators were shortlisted, including the Rosoboronexport for Amur, French Naval Group for enhanced Scorpene, Spanish Navantia for their S 80, Thyssenkrupp Germany for Type 214/218, and Daewoo Shipbuilding & Marine Engineering Co (DSMC) South Korea for DSME3000.
The two shortlisted SPs, MDL and L&T, are to hold discussions with the five shortlisted collaborators and table their best offer to the NHQ/Ministry of Defence (MoD). But here lies the problem. On paper, the logic looks good but is problematic in practice. Except for DSMC, all contenders have rescinded their offer because of the set conditions and their inability to share confidential commercial data with a yard.
There are other issues.
1) Can a yard select a submarine technology for induction into the Indian Navy?
2) Is indigenising even the priorities of the yard? For example, during the construction of two HDW Type 150 submarines at MDL in the mid-1980s and early 1990s, the MDL failed to indigenise much of the equipment and systems, as it was not in the MDL’s charter or even capability. It was left to the Navy to indigenise it.
3) Does the yard have the competence to evaluate the proposals for the transfer of technology under design & build? Isn’t it what the Indian Navy should do since it has the expertise?
4) Can the yard assure the secrecy of information while dealing with the five collaborators simultaneously?
History of collaboration
L&T and the Russian Rubin Design bureau have cooperated for the past three decades for a special project. The MDL has been working with the Germans (HDW), French (Scorpenes) and the Russians (surface ships). MDL has two assembly lines for submarine construction, the East Yard and the Alcock Yard, for the submarines from the east and the west, giving the French and the Russians a head start. What stops these two companies from the path of least resistance and dealing only with the design collaborators they are already working with for a long time?
The flawed SP logic
The entire SP scheme in this case appears to be a harebrained one.
Selecting a contractor on a commercial basis is a major issue. The selection must be in the technical audit, otherwise choosing an SP makes no sense. This is what Dhirendra Singh, who had previously served the Ministry of Defence as Joint Secretary (Planning & Coordination), Additional Secretary and Department of Defence Production, had recommended. But the MoD (Fin), wing in MoD from the Ministry of Finance, wanted a commercial bid process to pick an SP. This did not make any sense then, nor does it now.
The original proposal was to pick the SP based on a technical audit to meet QRs as also the total viability of the SP based on his technical, financial and track record in the relevant field. But the MoD (Fin) wants a commercial bid to select the entity ostensibly to avoid favouritism.
This is convoluted logic. Selection of SP is always made based on capacity, skills, track record and sustainability of the company. If a commercial competition has resorted, where is the SP logic?
The logic of SP
Standard Batteries was a company making submarine batteries. Someone from the Naval HQ said a competitor should be created. So Chloride India (now Exide India) came into the picture. Since the order requirement for just four boats was not enough, it could not sustain itself. The Standard Battery’s battery business was purchased by Exide, which included the submarine batteries. In that sense, Exide India became SP for some time. The concept is based on technical and financial viability. Now the Navy has two suppliers based out of market forces, and not naval intervention, and it will be interesting to see how it plays out this time since the Indian Navy has a growing requirement.
The Navy should pick up a vendor and tell them that they are the SP, and the Navy will support its order book for the next 20 years. The potential SP will be willing to invest in the needed infrastructure because it gets an economy of scale.
Look at the case of MDL, which has built up the expertise, capacity and infrastructure to build two designs simultaneously. If the orders don’t come faster, how will it amortise the costs of creating the facilities and remain economically viable? Then everyone will blame MDL for being an inefficient Defence Public Sector Unit (DPSU) fit for privatisation.
The way forward could be that the SP Scheme is rehashed wherein the user selects the collaborator who qualifies technically and has also bid for design transfer. Thus the collaborator can be selected on a competitive bid. Parallelly, the user selects the SP, and then the project’s total cost should be worked out with the collaborator’s cost dovetailed with the contractor’s cost precisely as was done for P75 in the case of Scorpene. The success of P75 is the fruit of the pudding.
(The author is a publisher, columnist and author. He writes on defence and strategic affairs and occasionally other topics. He tweets @chackojoseph Views expressed are personal and do not reflect the official position or policy of Financial Express Online. Reproducing this content without permission is prohibited).