Government shipyards win Rs 12,000 crore deal to supply 16 ASW craft to Navy

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Government shipyards win Rs 12,000 crore deal to supply 16 ASW craft to Navy

Leaving private sector competitors behind, government shipyards -- Cochin Shipyard Limited and Garden Reach Shipyard Limited -- bagged the order to supply 16 anti-submarine warfare (ASW) craft to the Indian Navy.

Under Prime Minister Narendra Modi's 'Make in India' programme, government shipyards are moving ahead of their private sector rivals in warship building as they have emerged winners in a Rs 12,000-crore deal to supply 16 anti-submarine warfare (ASW) craft to the Navy.

"As tenders for the Rs 12,000-crore deal were opened, the shipping ministry's Cochin Shipyard Limited and defence ministry's Garden Reach Shipyard Limited (GRSE) emerged as the two lowest bidders," a defence ministry source told Mail Today.

This is the third open tender deal involving competitive bids in the recent past which has gone to public sector firms. Recently, the Hindustan Shipyard Limited (HSL) won the contract for building two diving support vessels (DSVs) worth Rs 2,020 crore after it emerged as the lowest bidder.

Under the ASW shallow water craft deal, CSL emerged as the lowest bidder and GRSE the second lowest. The second lowest bidder will have to build the eight crafts at the price offered by the lowest bidder as per the tender issued by the Navy.

As per the defence procurement procedure, the company offering the lowest price for a particular weapon system is given the contract among the firms which meet technical requirements specified in the tender document.

When the private sector firms were allowed to bid for defence contracts, it was felt that they would be quoting lower prices than government firms, but this has proved to be otherwise.

In the recent past, there have been cases where Navy and Coast Guard projects have been delayed by private shipyards and in some of the cases, the delay has been by many years.

In one such case, a Gujarat-based shipyard has been able to supply only one out of six survey vessels ordered by the Navy even 10 years after signing the deal. In another case, a major private shipyard has not supplied even a single patrol vessel out of the contract for five signed more than six years ago.

Some of the major private sector shipyards are facing serious financial constraints and were cleared by the government for receiving tenders only after conditional clearances were granted to them by the defence ministry's finance wing.

Due to the improved performance of defence shipyards, the Goa Shipyard Limited was nominated by the government for partnering with the Russians for manufacturing four Talwar-Class follow-on warships worth more than Rs 20,000 crore.