L&T plans to build submarines for Navy
Larsen and Toubro, the diversified engineering conglomerate, is planning to build submarines as part of its defence projects venture. The company is planning to demerge the defence division into a separate entity.
Sources close to the development said L&T is in talks with a couple of foreign firms to develop required expertise to participate in the Indian Navy’s prestigious Project 75 and 76 to make underwater vessels.
The project is one of Navy’s 30-year sub-building programme. It aims to build 24 such vessels to meet challenges across the Indian Ocean. The project cost is estimated at around $14-16 billion.
“The company has received approval for the second line of submarines. L&T is planning to either co-ordinate with the state-owned firms or with a foreign partner to enter the project,” sources said.
A Delhi-based defence analyst said Navy has already signed a deal with French company DCNS for submarines and is planning to build the remaining 18 vessels indigenously. L&T is planning to enter this phase with a domestic or foreign partner.
In 2005 October, India signed a $3.5 billion deal with DCNS to acquire six Scorpene class submarines. The project included a license production of submarines in India under a technology transfer agreement with the state-owned Mazagone Docks.
L&T Chairman and Managing Director AM Naik said the company had tried to partner with the Mazagon Docks for the Scorpene project. “However, at that time the collaboration did not materialise. We are interested in entering the submarine project. We have the required expertise and after getting the Raksha Udyog Ratna status, we will be in a better position to bid for the future projects,” Naik said.
L&T is building Pinaka rocket launchers for two regiments of Indian army and is bidding for modernisation of Bofors guns. It is in talks with global players including the European Aeronautics Defence and Space Company (EADS), the parent firm of European airplane maker Airbus for a joint venture. L&T’s revenue from the defence sector was at Rs 3,000 crore in the last fiscal.
L&T has already received a Rs 440 crore order for making four ships for Rotterdam-based Zadeko. The company is planning to invest Rs 2,000 crore for a new green field shipyard that will make all types of vessels including CNG, LNG carriers and containers.