The Defence Ministry has kept ‘under examination’ the matter relating to joint ventures in ship building between public sector Mazagaon Dock Limited (MDL) and private sector shipyards.
“Some allegations, including non-compliance to joint venture guidelines, articles of association, memorandum of association etc have been received with regard to process of formation of joint ventures by Mazagoan Dock Limited with private sector shipyards. The matter is under examination,” Defence Minister A. K. Antony told Lok Sabha on Monday in a written reply.
The Minister’s written reply was in response to a question by Asaduddin Owaisi, AIMIM MP, who asked if MDL had adhered to all the articles in the guidelines while forming JVs with private shipyards.
Sources in the ministry said the Defence Ministry had formed a committee under an Additional Secretary rank officer to look into the JV formation, price discovery mechanism and several other aspects of the tie-up between MDL and private sector Pipavav Shipyard for building warships for the Indian Navy. Till the committee examines the matter and submits its report, the JV would be put on hold, the sources said.
Allegations of non-compliance and favouritism surfaced when MDL chose Pipavav as its partner with two rival bidders ABG Shipyard and Larsen and Toubro (L&T) questioning the selection process. The two companies had written to the Defence Ministry as well as the Navy Chief and urged MDL to reconsider its decision.
Pipavav Chairman Nikhil Gandhi said there were certain issues which were to be clarified and expressed hope that the JV company would be allowed to continue to work in the near future.