Opinion How India's Choice of Single Shipbuilder for Project-75I Submarines Could Create Monopoly-Related Challenges and Delays

India's recent decision to award the entire Project-75I submarine contract to Mazagon Dock Shipbuilders Limited (MDL) has raised concerns about potential monopoly-related challenges and delays.

Under this project, MDL will construct all six German ThyssenKrupp Marine Systems (TKMS)-designed submarines, solidifying its position as the primary builder of conventional submarines in India. While this approach streamlines production in the near term, it may have unintended consequences for the country's long-term ambitions to develop a competitive and self-reliant defence industrial base.

Critics argue that involving Larsen & Toubro (L&T), a leading Indian private sector defence and engineering company, in the project could have yielded significant strategic and economic benefits. L&T has a proven track record in complex defence projects, including the construction of nuclear submarines and other naval platforms. By allowing L&T to manufacture at least two of the six submarines, the government could have fostered a competitive environment, potentially leading to increased efficiency, innovation, and faster delivery timelines.

Furthermore, diversifying the submarine production base by leveraging L&T's state-of-the-art shipyard could have proven invaluable for future programs like Project-76, which envisions building 12 next-generation conventional submarines. With two manufacturers working concurrently, the Indian Navy's urgent need for modern submarines to counter growing maritime threats could be addressed more effectively.

India's experience with the Project-75 Scorpene submarines, where MDL faced delays and challenges despite receiving technology transfer, highlights the risks associated with a centralized manufacturing model. Introducing competition through private sector participation could mitigate these risks and accelerate the development of indigenous defence manufacturing capabilities, aligning with the government's Atmanirbhar Bharat initiative.

While concerns about potential workflow fragmentation and quality inconsistencies in a dual production model exist, these challenges can be addressed through robust project management, stringent quality control measures, and coordinated oversight by the Ministry of Defence (MoD) and the Indian Navy.

Ultimately, the decision to grant MDL exclusive manufacturing rights under Project-75I may prove to be a missed opportunity to foster a more competitive and resilient defence manufacturing ecosystem in India. By involving L&T, the government could have laid the foundation for a stronger and more self-reliant maritime defence capability in the long run.

 

[AJS]

The government may be well advised to have L&T and MDL form a JV to execute P75I. After all, it is not that L&T has been disqualified from P75I, it is the Spanish submarine design that they offered with Navantia that was not selected due to lack of sea time of its AIP technology, as opposed to the AIP tech of the German design fielded by HAL-TKMS which been in use for several years. That way the execution risk for the project may be reduced while ensuring that the nation builds a strong capability for rapidly designing and building subs in large numbers as needed by the Indian Navy. It is doubtful that MDL can alone handle so many projects: as things stand they have 3 different submarine projects on their hands now: the refit of the Scorpenes with AIP, further 3 Scorpene new builds and then P75I, not to mention upcoming P76; in addition to which they also have new cruiser, destroyer and frigate projects coming up. MDL’s track record of delivering ships within budget, schedule and quality is very poor. India cannot afford scattering its precious scarce shipbuilding resources.

 

[Somebody]

The construction work should have been split between MDL and L&T, each building 3 each. It would have been faster, and knowledge shared would have been useful for future submarine projects. It's definitely a missed opportunity.

 

[Baiju Bhaskaran]

L and T should be given the order to make three new Scorpene submarines and let MDL concentrate fully on P75 I to complete it on time.

 

[Anant]

The construction work should have been split between MDL and L&T, each building 3 each. It would have been faster, and knowledge shared would have been useful for future submarine projects. It's definitely a missed opportunity.

That would have worked only if L&T wasn't participating in the tender as a competitor.

 

[Anant]

Won't work. P-75I was a competitive tender, and since a production split was not announced earlier, you cannot simply now split the order to give L&T a few boats too. That is just asking for litigation to be filed.

Much as I would like to have seen L&T participate in this, it is too much of a complexity to arrange for that. Instead, with P-76 now looking at 12 boats, let's make sure two yards can build them in a 8:4 or 6:6 ratio.

 

[Scronkfinkle]

There is still scope where two additional submarines can be given as an auxiliary order to LnT and Navantia, to see what comes out; since these submarines have a 3000 T displacement, it is twice the size of the TKMS, sure they can be used by the navy in their tactical deployment; we have already wasted so much money on garbage things, might as well use this as an investment for gleaning some tech from two different design houses for us to speed up the learning curve for building our own tech.

 

[Provocateur Extraordinaire]

That would have worked only if L&T wasn't participating in the tender as a competitor.

Why? Tenders are often split up between L1 and L2 vendors, albeit at the L1 price. If I am not mistaken, arty guns in India have been awarded to both bharat forge and Tatas under this model.

 

[Deepak Hegde]

There is still scope where two additional submarines can be given as an auxiliary order to LnT and Navantia, to see what comes out; since these submarines have a 3000 T displacement, it is twice the size of the TKMS, sure they can be used by the navy in their tactical deployment; we have already wasted so much money on garbage things, might as well use this as an investment for gleaning some tech from two different design houses for us to speed up the learning curve for building our own tech.

What's the point ? How can you award any order for a submarine which has been declared not to meet the Navy's requirments ??? What was the need for the comparison tamasha then ? If the objective was to divide the order they could would have anyway given certain number to each of the two!!

 

[Deepak Hegde]

Why? Tenders are often split up between L1 and L2 vendors, albeit at the L1 price. If I am not mistaken, arty guns in India have been awarded to both bharat forge and Tatas under this model.

If you intend to do so, you need to announce it accordingly before the competitors enter the tender. Based on this the competitors decide if it makes commercial sense for them to enter the tender. You cannot change to goalpost once the ball has been kicked !!

 

[Surendra Barsode]

Defense Ministry should allot some submarines to L&T so that all the 6 submarines will be delivered faster. When we move Project 76 for 12 submarines, we would have 2 companies getting equipped with latest technology to deliver the required submarines in half the time. TKM should agree to have alliance with MDL and L&T.

 

[GMR]

Split order would have been great, bringing in efficiency of L&T and saving valuable years in getting the critical platforms .. With IN opting for split OEMs for many of its platforms, P 75I can be termed as a missed oppertunity