Reliance Defence, L&T may slug it out for Rs 20,000 crore warships contract
NEW DELHI: The defence ministry is gearing up to award a Rs 20,000 crore contract to build four amphibious warships under the Make in India programme, setting up a direct competition between Reliance Defence and L&T for bagging the order as it has decided to keep already stretched public sector shipyards out of the project.
Commercial bids submitted by the two private firms for the largest defence project under Make in India will be opened in the next three months, people familiar with the matter told ET.
The ministry has decided to place the order for all four warships with the winning private sector yard, reversing an earlier plan to construct two of them at the state-owned Hindustan Shipyard Limited, which is currently flooded with orders.
The order for four landing platform docks (LPDs) – warships that transport armed troops and vehicles across the sea – has been pending since 2014, with the ministry unable to decide how to proceed with the tendering process after two of the three shipyards that had originally bid for the project went bankrupt.
Private shipyards ABG Shipyard Ltd and Pipavav were in the fray for the contract along with L&T but the acquisition process came to a standstill as the yards ran into financial difficulties.
A capacity assessment report carried out by the defence ministry in 2015 had disqualified ABG Shipyard from the process after inspections revealed that the yard was not equipped to handle the large order.
Pipavav, which was taken over by Reliance Defence in 2015, went through at least two sets of assessments, with the ministry finally concluding in late 2016 that it was qualified technically and financially to execute the contract.
The next step will be the opening of commercial bids submitted by L&T and Reliance Defence, and the winner will be decided on the basis of the lowest price offered. While L&T had tied up with Spain’s Navantia for the contract, Reliance Defence has an agreement with French shipbuilder DCNS.
A modern LPD will be a significant addition to India’s offensive marine capability, with the vessels designed to carry tanks, infantry combat vehicles, trucks as well as choppers and fully equipped soldiers across the world.