The Defence Acquisition Council (DAC), headed by Defence Minister Rajnath Singh, on Friday approved the issuance of a Request For Proposal (RFP) for the construction of six conventional submarines under Project-75I at an estimated cost of ₹43,000 crore. At a meeting, it also approved the procurement of air defence guns and ammunition for the Army at an approximate cost of ₹6,000 crore.
“This is a landmark approval, being the first case processed under the Strategic Partnership (SP) model. This would be one of the largest ‘Make in India’ projects and it will create a tiered industrial ecosystem for submarine construction in India,” Mr. Singh said on Twitter on the submarine deal.
With this approval, India would be enabled to achieve its 30-year submarine construction programme envisioned by the government to acquire national competence in their building and for Indian industry to independently design and construct them, he noted.
The SP model of the Defence Procurement Procedure (DPP) aims to promote the role of Indian industry in manufacturing and build a domestic defence industrial ecosystem.
The RFP is expected to be issued in the next couple of months, a defence official said. It would would take at least two-three years for the deal to be concluded, and the given the high technology and the long timelines, the cost would be spread over many years, a defence official added.
MDL, L&T shortlisted
Last January, the DAC shortlisted Mazagon Docks Limited (MDL) and Larsen & Toubro (L&T) as the Indian partners for the deal. The Navy will now issue the RFP to them, who would respond to it in partnership with a foreign Original Equipment manufacturer (OEM).
The Indian companies are free to tie up with any of the foreign OEMs and one of the bids would be selected based on comprehensive evaluation.
As per the Navy’s requirements, the submarines, all of which will be built in India, should be equipped with Air Independent propulsion (AIP) modules and be able to fire land attack cruise missiles.
Five foreign OEMs- Daewoo Shipbuilding & Marine Engineering (DSME)(South Korea), Naval Group (France), Navantia (Spain), Rosoboronexport (Russia) and TKMS (Germany), have been selected.
The delay in the deal was the extra caution at each step of the process as this was being done for the first time, officials had said.
Long pending proposal
The modernisation of the Army’s air defence guns has been a long pending proposal and the DAC accorded approval for the procurement of the guns and ammunition under the Buy & Make (Indian) category of the procurement procedure. The Defence Ministry said that responses from about a dozen Indian companies had been received and “all of them have expressed their willingness and commitment to manufacture this complex gun system and associated equipment by ensuring technology assimilation in India.”
In another decision, the DAC extended the timelines for progressing urgent capital acquisitions under the delegated powers to the armed forces up to August 31, 2021 to enable them to complete their emergent and critical acquisitions.