Indian Navy battles defense ministry over future of $3 billion contract

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NEW DELHI – A war of nerves has brewed between senior Indian Navy officials and the Ministry of Defence over the possible cancellation of a program to replace top priority landing dock platforms.

Despite requests made by several naval planners not to cancel the procurement of four landing platform docks from domestic shipyards, costing around $3 billion, MoD is threatening to withdraw the tender said a top Indian Navy official. MoD wants to cancel the tender, because one of the last two bidders faces severe financial crunch. Considering another was eliminated in 2015 due to bankruptcy, that leaves only one player in the fray.

After the original 2012 call for bids was cancelled, the MoD refloated the tender in 2017. After receiving both commercial and technical bids, and revalidating the bids five times, MoD is now threatening to cancel the project again amid RNEL’s significant debt and the rejection of a debt resolution plan by the consortium of bankers.

Despite requests, MoD officials declined to comment.

L&T Ltd has teamed with Navatia of Spain, while RNEL has forged partnership with Naval Group of France to construct the LPDs. The ships would be roughly 30,000 ton helicopter landing platforms with the ability to carry an army battalion, including tanks and armored carriers.

“If MoD cancels the much needed LPD program, it will be signalling that MoD does not want to pursue and promote ‘Make in India’ initiatives,” said a senior representative of the industry chamber Confederation of Indian Industries.

If the program is withdrawn, it will be the second time an LPD tender will be cancelled by MoD within the last 15 years.



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