L&T completes order for 54 interceptor boats ahead of time, eyes naval orders ahead - Broadsword by Ajai Shukla - Strategy. Economics. Stuff.

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Sunday, 29 November 2020

L&T completes order for 54 interceptor boats ahead of time, eyes naval orders ahead

File photo of one of the earlier Fast Interceptor Craft that L&T has built for the Coast Guard


By Ajai Shukla

Business Standard, 30th Nov 20

 

In an emphatic statement of warship building capability in the private sector, Larsen & Toubro’s Hazira shipyard handed over the last vessel in an order of 54 fast interceptor craft to the Coast Guard on Sunday – ahead of time and within the budget.

 

With the four public sector shipyards – Mazagon Dock Ltd, Mumbai; Garden Reach Shipbuilders & Engineers, Kolkata; Goa Shipyard Ltd and Hindustan Shipyard Ltd, Visakhapatnam – almost invariably delivering warships years late and over-budget, L&T has staked a powerful claim to be considered for future shipbuilding orders.

 

The FICs delivered to the Coast Guard are 90-tonne vessels that can patrol the coastline at a scorching speed of 45 knots (83 kilometres per hour). L&T has built the 54 vessels for just under Rs 1,500 crore.

 

L&T is now contending strongly for a number of naval contracts. 

 

The biggest of these, which will indicate how serious the defence ministry is about bringing in the private sector into defence production, is for building six New Generation Missile Vessels (NGMVs) for an estimated Rs 13,600 crore. Multiple shipyards submitted bids in February in response to the navy’s Request for Proposals (RfP).

 

Earlier this month, L&T and other shipyards submitted bids for building three Cadet Training Vessels – a contract worth an estimated Rs 2,700 crore.

 

In June, several shipyards, including L&T, submitted bids for a contract, worth about Rs 700 crore, for two Multi-Purpose Vessels (MPVs) for the navy.

 

Another order in the pipeline, for which bids were submitted in October 2019, is for eight Fast Patrol Vessels, valued at about Rs 750 crore.

 

Private sector shipyards complain, however, that they are competing for crumbs. Major orders, each worth thousands of crores, for building corvettes, frigates, destroyers and aircraft carriers are awarded to the public sector shipyards “on nomination”, without competitive bidding.


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