India’s firms Reliance defense and L&T are likely to compete for bagging Rs 20000 crore ( US $3 billion) contract from the country's Defense ministry to build four amphibious warships.
Commercial bids submitted by the two private firms for the largest defence project under Make in India will be opened in the next three months. Moreover, the government's issue of tender has set up a direct competition between Reliance Defence and L&T, The Economic Times reported today.
It has been convenient for private firms as the government has already decided to keep already stretched public sector shipyards out of the project.
The ministry’s earlier plan was to construct two of them at the state-owned Hindustan Shipyard Limited, which already has many contracts in hand.
The order for four landing platform docks (LPDs) – warships that transport armed troops and vehicles across the sea – has been pending since 2014, with the ministry unable to decide how to proceed with the tendering process after two of the three shipyards that had originally bid for the project went bankrupt.
Private shipyards ABG ShipyardB Ltd and Pipavav were competing for the contract along with L&T but the acquisition process was halted as the yards have undergone financial difficulties.
ABG Shipyard was disqualified from the process after inspections in 2015 by defense ministry revealed that the yard was not equipped to handle the large order.
Pipavav, which was taken over by Reliance Defence in 2015, went through at least two sets of assessments, with the ministry finally concluding in late 2016 that it was qualified technically and financially to execute the contract.
The next step will be the opening of commercial bids submitted by L&T and Reliance Defence, and the winner will be decided on the basis of the lowest price offered. While L&T had tied up with Spain’s Navantia for the contract, Reliance Defence has an agreement with French shipbuilder DCNS.
A modern LPD will be an addition to India’s offensive marine capability, with the vessels designed to carry tanks, infantry combat vehicles, trucks as well as choppers and fully equipped soldiers.
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