India’s first joint venture between a public sector undertaking and a private firm to build warships has hit a roadblock.
The defence ministry has put on hold the collaboration between state-owned Mazagon Dock Limited (MDL) and Gujarat-based Pipavav Shipyard after competing shipbuilders alleged lack of transparency in the selection process.
Defence minister AK Antony said on Monday the freeze on the joint venture would remain till the government came out with a policy on such collaboration. He said the ministry would examine the complaints received from private shipbuilders.
“The issue needs to be fully examined and settled before any forward movement takes place,” he said. MDL and Pipavav were to hold 50% stake each in the joint venture company —Mazagon Dock Pipavav Limited.
Larsen & Toubro, ABG Shipyard and Bharati Shipyard, among the firms shortlisted by MDL, found fault with the joint venture and sought the defence ministry’s intervention.
Pipavav Shipyard chairman Nikhil Gandhi told HT from Paris that his company met all the requirements for the joint venture with MDL. He said, “We are disappointed over these baseless allegations. MDL chose us as a partner because we have world-class infrastructure such as dry docks, modular ship construction facilities and adequate land and water front.”
Private shipyards are increasingly angling for defence orders because of shrinking business in the global shipping market. Also, defence shipyards do not have the capacity to meet the navy’s growing requirements.
State-owned shipyards such as Kolkata-based Garden Reach Shipbuilders & Engineers and Vizag-based Hindustan Shipyard Limited have also floated expressions of interest to get joint venture partners.