India clears ₹43,000 crore project to build 6 high-tech submarines
The defence ministry on Friday cleared a project worth ₹43,000 crore for building six advanced submarines in the country under the government’s “strategic partnership” (SP) model to bolster the Indian Navy’s underwater force levels and counter the rapid expansion of China’s submarine fleet, officials familiar with the development said.
The defence acquisition council (DAC), India’s apex procurement body headed by defence minister Rajnath Singh, approved the proposal on Friday and the navy is soon expected to issue requests for proposal (RFP) for the programme, called P-75 India, the officials said.
The new submarines are part of the 30-year submarine-building programme approved by the Cabinet Committee on Security in 1999.
This is a landmark approval as it is the first case being processed under the SP model, the defence ministry said in a statement.
“This would be one of the largest ‘Make in India’ projects and will serve to facilitate faster and more significant absorption of technology and create a tiered industrial ecosystem for submarine construction in India. From a strategic perspective, this will help reduce current dependence on imports and gradually ensure greater self-reliance,” the statement said.
The SP model envisages indigenous manufacturing of major defence platforms by an Indian strategic partner who will collaborate with a foreign original equipment manufacturer (OEM) to set up production facilities in the country.
In January 2020, the defence ministry cleared two Indian and five foreign shipbuilders to take part in P-75I.
The Indian strategic partners cleared to collaborate with the foreign OEMs are Mazagon Dock Shipbuilders Limited and L&T. The foreign yards they can team up with for the project are the French Naval Group, German conglomerate Thyssenkrupp Marine Systems, Russia’s Rubin Design Bureau, Spain’s Navantia and South Korea’s Daewoo Shipbuilding & Marine Engineering Company.
The new submarines will be equipped with air independent propulsion (AIP) systems that will enable the vessels to stay underwater for longer periods and enhance their combat capabilities, the statement said.
With P-75I being cleared, the country has taken a step forward towards achieving the goals of its 30-year submarine construction programme, the defence ministry said.
The navy plans to operate a fleet of 18 new conventional submarines and six nuclear-powered boats. The government approved the plan to build six nuclear-powered submarines in 2015, tweaking the 1999 submarine-building programme.
“The availability of new technologies and advanced manufacturing capabilities to the industry will be an important step towards enhancing the nation’s quest for self-reliance in modern conventional submarine construction,” the statement said.
The project will take time to mature and if all goes well, the first submarine will be delivered to the navy not before 10 years, officials said.
The ministry will take the new project forward by issuing RFPs to the shortlisted Indian strategic partners who will then respond with techno-commercial offers in collaboration with one of the shortlisted OEMs. In exceptional cases, rules allow the Indian strategic partner to submit techno-commercial offers in collaboration with two OEMs.
The next steps in the long process will involve opening and evaluation of technical offers, trials, staff evaluation, opening of commercial offers of companies technically compliant with the RFP and finally, the selection of the strategic partner with the lowest bid.
A minimum of 45% indigenisation has to be ensured by the strategic partner in P-75I, officials familiar with the project said.
The strategic partner will also ensure that the sixth submarine has a minimum indigenous content of 60%, they added.
“There is an incentivisation model for specific equipment and systems under the hull, engineering and electrical heads wherein achieving indigenous content between 70% and 100% will ensure that an incentive of 5% to 20% of the equipment/system cost is paid to the strategic partner as a reward,” said one of the officials cited above.
He added that a two-contract model is envisaged in P-75I -- one contract between defence ministry and the strategic partner, and the second one involving the foreign collaborator.
In August 2018, DAC cleared a project under the SP model for building 111 naval utility helicopters (NUH) to replace the navy’s outdated fleet of French-designed Chetak choppers. But there has been no forward movement in the NUH project worth ₹21,738 crore.
DAC on Friday cleared another project worth ₹6,000 crore for air defence guns and ammunition.