MANILA, Philippines — An Indian company has offered the lowest bid for the purchase of two frigates for the Philippine Navy, one of the biggest projects in the military's modernization program.

Garden Reach Shipbuilders & Engineers Ltd., a state-run firm, has been declared the lowest bidder for the multi-billion peso frigate acquisition project, Defense Undersecretary Fernando Manalo told The STAR in a recent interview.

Garden Reach offered to supply the ships for P15.047 billion, about P950 million lower than the P16 billion approved budget for the project.

A total of four firms joined the bidding for the project last month. Other companies that submitted offers were Hyundai Heavy Industries, Inc. and Daewoo Shipbuilding & Marine Engineering Co. Ltd., both from South Korea; and Spanish firm Navantia S.A.

Only Garden Reach and Hyundai were declared as qualified bidders as the two other bidders had failed to meet some documentary requirements.

Hyundai submitted a bid worth P15.744 billion, higher by close to P700 million than the offer of Garden Reach.

Garden Reach will have to meet the post-qualification requirements before it can be declared the winning bidder. The post-qualification phase allows the government to check if the offer of the lowest bidder is compliant with the technical specifications of the project. The phase involves visits and inspections to the suppliers' office and facilities.

"The technical working group is preparing the post-qualification plan," Manalo said.

In its website, Garden Reach described itself as "the premier warship building company in India" that is under the administrative control of the Ministry of Defense.

The company said it has built 95 warships like state-of-the-art frigates and corvettes and fast patrol boats since 1960. It also claimed to have built and supplied close to 700 vessels to carry men and materials for surveillance of coast line by police forces.

The frigate acquisition project is one of the military upgrades aimed at boosting the Philippines's territorial defense and disaster response capabilities.

The ships can enhance the Philippines's security presence in the disputed West Philippine Sea, part of the South China Sea, and can participate in relief efforts in calamity-struck areas.

The two frigates are also expected to complement the BRP Gregorio del Pilar and BRP Ramon Alcaraz, vessels acquired by the Philippine Navy from the United States Coast Guard.

The Defense department is also planning to spend about P2 billion for the ammunition of the two ships.