Stung by poor foreign response to submarine project, Modi govt tries to allay industry concerns

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New Delhi: Stung by the refusal of France, Russia and Sweden to take part in Project 75 India (P75I) and Germany’s non-committal stand, the Defence Ministry has cleared key changes in the tender document issued to allay fears of foreign firms, especially in the context of liability, LOKJANTA STAFF has learnt.

Indian Navy vice chief Vice Admiral S.N. Ghormade said Thursday that the Defence Ministry has cleared the responses to some of the queries put forward by the Indian companies and these will be sent out soon.

The P75I, under which six state of art conventional submarines are to be built with air-independent propulsion (AIP) system — which will allow them to remain under water for longer duration — is being pursued under strategic partnership. In this, an Indian shipyard will bid for the project along with a foreign original equipment manufacturer (OEM).

However, the Naval Group of France, Rubin Design Bureau of Russia and the SAAB of Sweden have officially informed the Indian Navy of their inability to take part in the programme.

One of the primary reasons why these three firms have withdrawn is the Navy’s insistence on having a proven AIP, a technology which only the Germans and the South Koreans have.

Asked if the concerns addressed include this clause, vice admiral Ghormade said in a press conference that this issue was not raised by the Indian companies.

While he remained tight-lipped about what concerns are being addressed, sources in the defence and security establishment told LOKJANTA STAFF that the main issue was related to the liability clause.

In the strategic partnership, the Indian firm will own the majority stake, the liability in case of delay in implementation of project, quality and rest lies with the foreign OEM.

Though refusing to elaborate, sources said that this concern has been addressed by the Defence Ministry which has cleared a tripartite liability clause.

On the issue of insistence of proven AIP, the sources said that no changes are being made to that because the Navy cannot go ahead with the project without a proven system.

“You can’t say you will carry out trials at Indian Navy cost and see whether the system is actually working or not. P75I is crucial and cannot be delayed and hence the insistence on proven AIP technology,” a source said.

Other concerns with regard to the timeline of delivery have also been addressed, sources said. Asked if the project will still be pursued under the strategic partnership route, a source said, “At least for now that is the case”.

Russia had last week publicly spoken out against P75I saying that “drastic changes” were needed in the tender for the project for the programme to come through.


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Extension on bid submission deadline

“The Swedish were the first one to pull out of the project. Then Germany and now France. We are also not participating,” Andrey Baranov, deputy director general, Foreign Economic Activities at the Rubin Design Bureau, Russia’s state-owned submarine designers, had said while responding to a query by LOKJANTA STAFF on the side-lines of Army 2022, a defence exhibition held in Moscow.

He had added that “the requirements stated in the RFP (request for proposal) demand a very strict time period. And a lot of responsibility is assigned to the designer. At the same time, the designer has no influence on the construction process that will happen in India.”

Baranov further added, “The key requirement (in the RFP) is that submarines have to be constructed in India. If timelines are not met, the penalty is very high. From the very beginning we have been saying it is not possible to make the first submarine in such a short time. This concern was not considered and an RFP was issued. And hence Russia informed the Indian Navy about its unwillingness to participate.”

Such has been the poor response to the RFP issued that the Indian Navy that it was forced to extend the date for submission of bids to the end of November this year, from the already extended date of June end.

The foreign companies have sought tweaking of the strategic partnership as well as removal of the clause for an in-service AIP system.

The Navy’s ambitious 30-year submarine plan has been stuck and way off the target.

Under the ambitious 30-year-old plan that ends in 2030, India was to build 24 submarines — 18 conventional and six nuclear-powered submarines (SSNs) — as an effective deterrent against China and Pakistan.

India is currently left with only 15 submarines.

Sources said that it is hoped that after the companies receive the clarifications, foreign OEMs, especially Germany’s ThyssenKrupp Marine Systems, will bid for the project.

(Edited by Poulomi Banerjee)


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