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Navy lines up mega deals for helicopters, submarines

Defence Minister Rajnath Singh surveying the naval reconnaissance aircraft P81, during his visit to the Navy’s Eastern Command in Visakhapatnam on Sunday.

Defence Minister Rajnath Singh surveying the naval reconnaissance aircraft P81, during his visit to the Navy’s Eastern Command in Visakhapatnam on Sunday.   | Photo Credit: Special Arrangment

Much-delayed Strategic Partnership model reaps dividends

The Navy has lined up several multi-billion dollar deals for helicopters, long-range maritime patrol aircraft (LRMPA) and submarines which are in important stages of the procurement.

The deals for 24 MH-60R multi-role helicopters (MRH) and 10 more P-8I LRMPA are at an advanced stage with the U.S. through their Foreign Military Sales route. The process for 111 Naval Utility Helicopters and six conventional submarines under Project-75I has kicked off through the much-delayed Strategic Partnership (SP) model.

“The case for 24 MRH is at the cost negotiation stage and is expected to be concluded by September,” a Defence source said. In April, the U.S. formally approved the sale potentially valued at $2.6 billion.

The Navy has moved a proposal for 10 more Boeing made P-8Is estimated to cost over $3 billion as a follow-on case to the 12 aircraft acquired earlier. The proposal has been cleared by the Defence Ministry’s Capital Acquisition Plan Categorisation Higher Committee. “The file will now go to the Defence Acquisition Council (DAC) for approval,” the source said.

The Navy had initially procured eight P-8Is in a $2.1-billion deal in 2009. It exercised the optional clause for four more in a deal worth over $1billion signed in 2016. The aircraft are part of the 312A Naval Air Squadron based at Arakkonam in Tamil Nadu.

The deal for 111 NUH is the first one to be processed under the ambitious SP model meant to promote domestic private sector participation in Defence manufacturing. While three foreign Original Equipment Manufacturers (OEM) have responded, eight Indian companies have expressed interest in participating in the tender.

“The process for selection of qualified Indian private partners will begin shortly,” another Defence source said. The Navy has already discussed the qualitative requirements with the OEMs and as per the SP model, the Request for Proposal (RFP) has to be issued to the Indian SP partner.

The P-75I for six submarines will be the second deal to be processed under this model. Early this month, the Navy issued the Expression of Interest for shortlisting potential Indian strategic partners for the project estimated over ₹45,000 crore.

The potential SPs are expected to respond to the EoI within two months, the Navy has said. The Indian partners will be shortlisted based on technical and financial capability to execute the project and absorb the technologies.

However, the SP is still a long drawn process with many uncertainties as such a model is being attempted for the first time.

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Printable version | Feb 24, 2020 8:55:32 PM | https://www.thehindu.com/news/national/navy-lines-up-mega-deals-for-helicopters-submarines/article28235808.ece

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