EXCLUSIVE

L&T-Navantia, Reliance-Naval Group commercial bids left unopened; re-tendering with revised service requirements likely for building India's second-largest warships

Navantia's Juan Carlos I LHD even has a STOVL capability to launch deck-based fighter aircraft

The Indian Navy has sought the approval of the Ministry of Defence (MoD) to cancel a $2.8 Billion (Rs 20,000 Crore) tender for building 4 Landing Platform Docks (LPDs) or amphibious warfare ships which was meant to be the largest shipbuilding contract for a private sector Indian shipyard.

The Navy wants to move this procurement case afresh and re-tender with revised terms and quality requirements.

"We've moved the case to the MoD to let us withdraw the LPD tender and re-visit our requirements. We're awaiting a response," Vice-Chief of Naval Staff Vice-Admiral G Ashok Kumar told this reporter.

The Indian Navy did not open the price bids, pushing the project into a limbo. While no official statement was made to explain the reluctance to open the price bids for determining an 'L1' winner, the Navy is reported to have had grave reservations over the ability of one of the bidders to deliver on the contract

Larsen & Toubro and Reliance Naval and Engineering Limited were competing for this Buy and Make (India) tender in partnership with Spain's Navantia and France's Naval Group respectively. The two had submitted bids for constructing LPDs based on the design of the Juan Carlos I and Mistral respectively at the Katupalli and Pipavav shipyards.

After a go-ahead to the project by the Defence Acquisition Council (DAC) chaired by the then Defence Minister Arun Jaitley in May 2017, the two contenders had submitted revised commercial bids to build all four ships. The initial proposal in the December 2013 tender envisaged construction of two LPDs by a private sector shipyard and the remaining two at the Ministry of Defence-owned Hindustan Shipyard Limited.

Naval Group's Mistral was a strong contender for the Indian Navy's LPD tender, which presented the biggest shipbuilding opportunity to private Indian yards

But the Indian Navy did not open the price bids, pushing the project into a limbo. While no official statement was made to explain the reluctance to open the price bids for determining an 'L1' winner, the Navy is reported to have had grave reservations over the ability of one of the bidders to deliver on the contract.

The Navy has now finally moved to end the impasse, and sought cancellation of the contract on grounds of the inordinate delay creating the need to revise quality requirements which were determined over a decade ago. "The service requirements were frozen in 2008. Withdrawal of this tender will give us an opportunity to revisit the requirements. We've requested the MoD for approval," the Vice-Chief of Naval Staff told SP's Naval Forces.

With the programme now up for re-tendering, it is likely that the public sector too could be allowed to bid, sources indicated, to avoid a single-vendor situation and make the competition more broad based. It could also give an opportunity to other OEMs including BAE Systems (Ocean class LHD), Raytheon (San Antonio class LPD), ThyssenKrupp (MHD-150), Hanjin Heavy Industries (Dokdo class assault landing ship) and Schelde Naval Shipbuilding (Enforcer LPD) to enter the fray as technology providers

This tender presented the biggest opportunity so far to private Indian shipyards. Also, it involved building the largest warships in India after the under-construction aircraft carrier Vikrant.

The Indian Navy moved the case for building 20-30,000-ton class LPDs after the experience of operating the INS Jalashwa, the erstwhile USS Trenton which was acquired from the US Navy in 2007. These vessels are meant to scale up India's out of area amphibious warfare, island protection and disaster response capabilities. The requirements specified a capability to carry 10 heavy helicopters on the deck - making it a virtual helicopter carrier - besides over 900 amphibious troops, 20 infantry combat vehicles and 40 heavy trucks in its belly for a beach landing. The Juan Carlos I, which has also been built for the Australian and Turkish navies, also has a short take-off and vertical landing (STOVL) capability for deck-borne fighters like the F-35.

Specified on board weapons including point missile defence and anti-torpedo systems, along with an endurance of 45 days at sea were among the features meant to give this ship the capability of becoming a naval command post. These LPDs were also meant to be India's first electric propulsion warships.

The RFP was issued in December 2013 also to ABG Shipyard, besides Pipavav (later acquired by Reliance) and L&T. ABG, which had partnered the US' Alion, was later disqualified reportedly because of poor financial condition.

With the programme now up for re-tendering, it is likely that the public sector too could be allowed to bid, sources indicated, to avoid a single-vendor situation and make the competition more broad based. It could also give an opportunity to other OEMs including BAE Systems (Ocean class LHD), Raytheon (San Antonio class LPD), ThyssenKrupp (MHD-150), Hanjin Heavy Industries (Dokdo class assault landing ship) and Schelde Naval Shipbuilding (Enforcer LPD) to enter the fray as technology providers.