Navy’s minesweeper deal falls through after South Korea talks fail
The Rs 32,640-crore programme for 12 new mine counter-measure vessels, to be built at Goa Shipyard Limited in collaboration with a Busan-based yard, Kangnam Corporation, was pegged as one of the costliest Make in India initiatives.
Negotiations with a South Korean shipyard for new minesweeper vessels have collapsed at the final stage, delivering a blow to the Indian Navy’s efforts to shore up its mine-warfare capability, a top government official involved in the project said on Sunday.
The Rs 32,640-crore programme for 12 new mine counter-measure vessels (MCMVs), to be built at Goa Shipyard Limited (GSL) in collaboration with a Busan-based yard, Kangnam Corporation, was pegged as one of the costliest Make in India initiatives.
But the failed talks with the Korean yard over pricing have left the government with no choice but to begin a fresh global hunt for minesweepers. “We were unable to resolve commercial complications despite our best efforts. This particular deal with the Koreans is off,” GSL chairman Rear Admiral Shekhar Mital (retd) told Hindustan Times.
Minesweepers are deployed to secure harbours by locating and destroying mines. The Indian Navy has been struggling to scale up its mine-warfare capability. Its current mine counter-measure force consists of six vessels bought from the erstwhile Soviet Union in the late 1970s while experts say the navy requires at least 24 minesweepers to secure major harbours in the country.
The situation is likely to worsen as the existing minesweeper fleet is to be decommissioned between 2018 and 2020.
Mital said a fresh request for proposal (RFP) will be issued to foreign military contractors for the technology transfer for the MCMV project.
This will be India’s third attempt in a decade to build MCMVs locally.
In 2014, the government had scrapped a contract to build minesweepers in India in partnership with Kangnam Corporation amid allegations that the Korean firm had hired middlemen to swing the deal in its favour.
HT had reported on November 19, 2017 that India and South Korea were struggling to hammer out the MCMV deal due to commercial complications.
A March 2017 parliamentary report on the declining levels of naval force had warned that India would be without a single minesweeper in 2021 even if the Korean deal went through. The latest setback means that there may be no minesweepers even beyond 2021.
The construction of the first vessel was supposed to begin in April 2018, and deliveries of all 12 MCMVs were to be completed between 2021 and 2026. “The timeline will have to be revised. This has certainly upset our calculations,” said an officer familiar with the force’s modernisation programme.
Mital admitted that the project would be delayed but stressed that GSL had finalised all intricate technical details and specifications for the vessels during the last two years. The vessels are expected to have 60% indigenous content.
“The decision to issue a fresh RFP by the defence minister is in line with numerous clearances accorded to pending acquisition cases,” he said.
Kangnam Corporation and Italian firm Intermarine could bid for India’s latest tender, experts said.