The Telegraph
Sunday , October 26 , 2014
 

Defence allowed to flex shopping muscle

Arun Jaitley

New Delhi, Oct. 25: Defence minister Arun Jaitley today approved purchase plans worth Rs 78,000 crore for the navy, army and air force, chiefly inviting Indian public and private companies to compete in an ambitious submarine-building programme in an Indian shipyard.

Indian companies have so far not demonstrated the capability to develop a submarine in its entirety. But Jaitley and the Defence Acquisitions Council (DAC) expect that the shipyards selected on the basis of the navy’s requirements will enter into foreign ventures immediately to qualify in the competition.

The decision to approve the Project 75i programme to build six submarines was prompted by two factors.

First, a 30-year submarine-building programme the navy had drawn up in the 1990s is way behind schedule. The navy wanted to have 24 submarines by 2024; it now effectively has 13 with two or three constantly under refit.

Last year, it lost the INS Sindhurakshak, which went down in its berth in Mumbai.

Second, understanding that submarine-building programmes are delayed because foreign vendors cannot be made more accountable, the establishment has decided to make an Indian partner equally responsible.

This means a bulk of the estimate contract value of Rs 50,000 crore (which is likely to escalate), can translate into profits for Indian firms.

Jaitley’s chief purpose in the DAC meeting, his first after returning to office following surgery, was to send the message that the government was ending the tardiness that marked defence procurements under his predecessor, A.K. Antony.

The P75i project is one of the country’s biggest military acquisition programmes. The navy was also signalling that the delays were damaging its capabilities, with more ships being decommissioned than inducted into service.

A committee headed by the defence production secretary will visit seven shipyards to identify those capable of making the P75i submarines.

Five of these are in the public sector: Mazagon Dock (Mumbai), Cochin Shipyard, Garden Reach Shipbuilders and Engineers (Calcutta), Hindustan Shipyard (Visakhapatnam) and Goa Shipyard.

The two possible private contenders are Larsen and Toubro (yard in Tamil Nadu) and Pipavav (Gujarat). Larsen and Toubro is already involved in India’s Arihant-class nuclear submarine project.

The P75i submarines are said to be a generation ahead of the submarines that the navy currently operates. The navy wants three additional features to improve its capabilities: air independent propulsion, designed to allow conventional submarines to stay underwater longer than other conventional submarines; the capability to launch land-attack cruise missiles; and enhanced stealth features to reduce noise and vibration and make the vessels harder to detect by sonar.

The committee has six weeks to finalise its recommendations on the shipyards.

The DAC has also opted for the Israeli offer to sell “Spike” anti-tank guided missiles to the army, practically shelving the US offer of the Javelin missile made by Raytheon. To begin with, the council has approved Rs 3,200 crore for an outright purchase of more than 8,000 Spike missiles and more than 300 launchers.

The council has also earmarked an estimated Rs 1,800 crore to purchase more than 350 BMP-II amphibious armoured personnel carriers for the army.

In addition, the council approved Rs 740 crore for 1,768 pieces of railway rolling stock (which carry army heavy vehicles). A repeat order of 12 Dornier aircraft for Rs 1,850 crore for the navy goes to defence PSU Hindustan Aeronautics. The navy operates a fleet of more than 40 Dornier aircraft that are used for surveillance and search and rescue.