MoD to seek fresh bids from L&T, Reliance for Rs 20,000-cr warship project

larsen and toubro

* On media reports that MoD will seek fresh bids from bidders for the Rs 20,000 cr Landing Platform Docks (LPD) for the Indian Navy project, senior MoD officials called it a premature report.

* MoD officials said no official communication has been sent out on the same by the ministry.

* After the last DAC decision of 2-0 to 4-0, MoD is still debating on the mode of way forward, whether to ask fresh bids or use existing bids and seek discount.
* A decision they said on the modus operandi may take 10-15 days.

* Building of these four LPDs is the biggest order for private sector in defence till date.

* Discussions on the way forward are pending due to non availability of RM even though the bureaucracy has worked out options in this regard.

* RM Arun Jaitley is back on Friday.

*L&T and RDEL are the two strong contenders in fray for this project.

* While RDEL will work with DCNS of France and Spanish company Navantia, which designed the 13,000-tonne “Galicia” class LPD in the 1990s.

* More recently, the 27,000-tonne Juan Carlos I Amphibious Assault Ship for Spain has tied up with L&T to work jointly on building LPDs.

* Each LPD will approximately cost Rs 6,000 crore and they are expected to be delivered over the next 10 years.

The ministry of defence (MoD) will be seeking fresh commercial bids from Larsen &Turbo (L&T) and Reliance Defence and Engineering (RDEL) – formerly Pipavav Defence and Offshore Engineering Company – for the Rs 20,000-crore Landing Platform Docks (LPD) for the Indian Navy project.

On the basis of L1 (lowest bidder), decision will be taken on who will build the four LPDs – the biggest order to private sector in defence till date. Under Prime Minister Narendra Modi’s ‘Make in India’ initiative, New Delhi wants to build indigenously four such warships, which will be the biggest-ever made in the country other than the 40,000-tonne sea-borne aircraft carrier INS Vikrant.

“The need for fresh commercial bids became necessary as the earlier RfP proposed that the LPDs will be divided between private shipyards selected through a competitive process and on nomination basis to Hindustan Shipyard (HSL),” sources told FE.

Due to several reasons including the current order book of HSL, the decision has been taken to give all four LPDs to the private sector shipyards. According to Vice Admiral DM Deshpande, Controller of Warship Production and Acquisition, “If all goes well, a contract for procurement of Landing Platform Docks will be finalised by the end of this year.”

As reported by FE in 2016, private firm ABG Shipyard (ABGSL) was out of the race as the company failed the Corporate Debt Restructuring (CDR) carried out by ICICI. The yard, which had been shortlisted by the Indian Navy along with L&T, did not get approval from the Controller of Warship, Production & Acquisition at MoD.

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Credit: The Financial Express

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