India makes initial bid selections for $7 billion submarine project

By: Vivek Raghuvanshi

NEW DELHI — India on Tuesday announced the selection of domestic and foreign defense companies for the construction of six diesel-electric submarines with air-independent propulsion technology as part of an effort worth more than $7 billion.

The submarines will be manufactured in India under the Navy's P75I program and guided by the Ministry of Defence's Strategic Partnership model, which aims to build indigenous capabilities, a senior ministry official told Defense News.

Two domestic shipyards companies — state-owned Mazagon Dock Shipbuilders Limited and private sector firm Larsen & Toubro — were shortlisted to collaborate with five overseas original equipment manufacturers — Rubin Design Bureau of Russia, Naval Group of France, Navantia of Spain, ThyssenKrupp Marine Systems of Germany, and Daewoo Shipbuilding & Marine Engineering of South Korea.

“The defence acquisition council approved the shortlisting of Indian strategic partners and potential original equipment manufacturers (OEMs) who would collaborate to construct six conventional submarines in India,” the MoD said in a statement.

An expression of interest was issued in June 2019 to four domestic companies: Mazagon; Larsen & Toubro; Reliance Naval and Engineering Limited; and a consortium of Hindustan Shipyard Limited and Adani Defence.

An internal MoD committee rejected the Hindustan-Adani Defence bid because it did not meet eligibility requirements, and the ministry noted that Reliance Naval and Engineering did not meet financial requirements.

A separate, restricted expression of interest was issued in July 2019 to the five foreign OEMs as well as Saab of Sweden. Saab chose not to participate in the program, citing lack of clarity.

For the P75I program, the Rubin Design Bureau is offering the Amur 1650 submarine; France is offering the Scorpene 2000; Navantia has offered the S-80-class sub; TKMS offered its HDW class 214; and Daewoo is offering its KSS-III.

The MoD official said submissions were accepted in September and selection done early this month.

A senior Indian Navy official said the OEMs must provide full technology transfer of critical systems of the submarines such as air-independent propulsion technology, sensors, and communication and electronic warfare suites. They must also help establish a domestic supply chain for spare parts and material as well as assist in training the local labor force, the official added.

The OEMs are free to set up joint ventures or equity partnerships, or make royalty arrangements with Indian prime partners and other domestic suppliers.

Another MoD official said a request for proposals will be issued to two shortlisted Indian companies who will set up a technical partnership with one of the five shortlisted OEMs and submit both financial and technical bids by the end of 2020. Thereafter, the technical and financial bids will be evaluated, with final selection expected in mid-2022. The selection will be made based on the lowest price offered, he added.

Under the P75I program, the submarines must be made up of 65 percent indigenous material.

The MoD said any contract between an Indian strategic partner and a foreign OEM must include provisions for the protection of classified information. In addition, the shortlisted OEMs must confirm their willingness to cooperate with the selected Indian company, including life-cycle support and transfer of technology.

https://www.defensenews.com/industry/2020/01/22/india-makes-initial-bid-selections-for-7-billion-submarine-project/