L&T versus Goa Shipyard: a shipbuilding comparison between public and private sector - Broadsword by Ajai Shukla - Strategy. Economics. Defence.

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Tuesday 15 December 2020

L&T versus Goa Shipyard: a shipbuilding comparison between public and private sector


By Ajai Shukla
Business Standard, 16th Dec 20

Goa Shipyard Ltd (GSL) on Monday launched the fifth and final Offshore Patrol Vessel (OPV) out of an order of five such vessels it is constructing for the Indian Coast Guard (ICG). The vessel has been named ICGS Saksham.  

Since Prime Minister Narendra Modi inaugurated GSL’s indigenous shipbuilding project on November 13, 2016, the defence public sector undertaking (DPSU) shipyard has handed over two OPVs to the ICG and launched the other three. “Launching” is a major construction landmark, in which the completed hull is put into water. It is followed by “outfitting” the vessel with its superstructure, electronics and combat weaponry. 

“In spite of the ongoing Covid situation and disruptions in supply chains, it is creditable for the shipyard to complete the 100 per cent hull construction and launch the vessel within 18 months from keel laying which was in June 2019. The vessel is in advanced stage of outfitting and will be ready for delivery by October 2021, as per the contractual schedule,” stated the ICG on Monday. 

GSL’s OPVs are 2,350-tonne vessels, armed with 30-millimetre guns and equipped with “quick response boats” to handle emergencies along the coast, piracy and anti-terrorism missions. 

Speaking at the launch, GSL chief, Commodore BB Nagpal (Retired) stated that more than 70 per cent indigenisation has been achieved for these OPVs. He thanked the ministry of defence (MoD) and ICG for their confidence in GSL.

This “confidence” in DPSI shipyards causes heartburn amongst private shipyards, such as Larsen & Toubro (L&T) and Reliance Naval (RNaval), who claim they can build warships faster, cheaper and better than the public sector yards.

To test this claim, Business Standard compared GSL’s performance in this five-OPV contract to a similar contract L&T won for designing and constructing seven OPVs. The contracts were awarded roughly at the same time: to L&T on March 30, 2015 and on August 26, 2016 to GSL. 

GSL’s contract stipulated delivery of the first vessel in 42 months, that is in February 2020 and the second OPV six months later, followed by the remaining three vessels at four-month intervals. As it turned out GSL delivered the first two OPVs – ICGS Sachet and ICGS Sujeet – three months late. It is learnt that the remaining three OPV will breach delivery timelines even more.

Meanwhile, the L&T contract stipulated delivery of the first OPV in 36 months and subsequent vessels at six-month intervals. So far, L&T has delivered five OPVs, all of them ahead of the contracted schedule.  

Another striking difference is the cost at which L&T and GSL are building their respective OPVs. L&T, which won its contract in a competitive tender, is charging the ICG Rs 185.6 crore for each OPV. In contrast, GSL, which was awarded the contract through “nomination” – the MoD’s terminology for handing over contracts to DPSUs without tendering – is charging the ICG Rs 334.5 crore per OPV.

Such a cost differential could only be justified, were GSL’s OPVs to have significantly higher combat specifications, far better performance or a much bigger size than L&T’s. In fact, both builders are delivering very similar vessels.

The main difference is that GSL supplies OPVs fitted with a 30-millimetre gun, whereas L&T’s contract requires it to supply fitting for a gun, but not the gun itself. This, however, is not a major difference, since a 30-millimetre gun costs only about Rs 2.5 crore. 

Nearly identical: L&T and GSL offshore patrol vessels






98.2 metres

105 metres

Beam (Max)

14.9 metres

13.6 metres

Draught (Max)

3.57 metres

3.65 metres


(Full Load)

2,147 tonnes

2,350 tonnes

Maximum speed

26 Knots at 100% rating

23 Knots at 92% rating

Cruising speed

12 – 14 Knots

12 – 14 Knots


5,000 Nautical Miles at cruising speed, with 25% reserve

6,000 Nautical Miles at cruising speed, with 25% reserve

Power Generation

       4 x 500 KW generators

       1 x 86 KW diesel genset

       4 x 450 KW generators

       1 x 80 KW diesel genset


Stage through: Up to 10 tonnes

Hangar facility: Up to 6.8 tonnes

Stage through: Up to 11 tonnes

Hangar facility: Up to 6.5 tonnes

Weapons &


       Fitted for 30mm gun with Fire Control System (FCS)

       Fitted for 2 x 12.7mm guns

       30mm gun with Fire Control System (FCS)

       Fitted for 2 x 12.7mm guns


The length, beam and draught (minimum depth of water in which the OPVs can operate) of both OPVs are about the same, as are their displacements: 2,147 tonnes for the L&T OPV, compared to 2,350 tonnes for the GSL vessels.


Both vessels have nearly identical maximum and cruising speeds, while the GSL OPV can go 6,000 nautical miles, compared to the slightly lower 5,000 nautical miles endurance of the L&T OPV.


The power generating capability of the L&T OPV is slightly higher than that of the GSL vessel, which is a useful capability, given that modern warships’ combat and navigation sensors, radars and communication suites all consume significant amounts of power.


GSL’s patrol vessel can provide “fly-through” support to a marginally larger helicopter, while the L&T OPV can provide hangar facilities to a marginally larger chopper. 



  1. A stark contrast in the performance of the two shipyards on what are very similar projects. L&T also delivered the K-9 Vajra tracked SP howitzers ahead of schedule.

  2. Nice analysis...but why most of the PSU are less efficient?
    Is it because of low automation,planning low interest and investment by government.

  3. You should remove RNE from the list of pvt shipyards. Their performance has been dismal and this gives ammo to the DPSUs. Meanwhile the MoD conveniently ignores L&T.

    Re ship costs, there is no way L&T is making much money on the OPV program given the cost disparity with the GSL built OPVs. I think the L&T OPV program is probably a loss leader that was expected to bring in more naval business in due course.

    Thus far, the only additional naval business for L&T is a GRSE subcontract to build three of the four survey vessel hulls for a small fraction of the unit cost of each ship. Same story as GSL: GRSE gets to keep most of the money.

    One hope that the MoD actually awards one or more major contracts to L&T as the prime in due course.

  4. Self-explanatory; no-brainer. PSUs are draining the country. Merge the PSUs with the private builders, keep the key personnel and retire the rest with money saved by building 1-2 new OPVs
    . No developed country indulges in business even though they subsidize R&D in several different fields like EVs or new planes or drones or radars. We need to ease out the employees who are sure to remain unmotivated and lethargic. This model was OK before 199. Now the money we earn must be wisely deployed as we are now in an open global competition. It is truly the survival of the fittest

  5. Cost difference between L&T and GSL is staggering - in effect the Coast Guard could have got an additional 2 or 3 ships for the same price. All this talk of supporting private enterprise is just talk, unless of course money changes hands such as in the form of election funding, in which case select private companies are favored. There is a bias in favor of PSUs - inefficiency, sloth and waste are accepted but for a good reason: the PSUs provide all kinds of favors to the bureaucratic and political masters, ranging from use of company facilities such as cars, guest houses and so on, to political support via their unions.

  6. Why this blog feels like favouring L&T and targeting GSL in negative?
    When there is a comparison made, then the comparison should be complete and not selective. Here, it is clear that the author is biased towards private industries and not providing the complete picture.

    When we are doing the comparison then why don't we talk about Reliance Naval too, they were awarded a similar contract, that too by taking away the orders from PSU Shipyards, can the author care to comment on the progress made in that order? What I can tell you is that even the EMD (Security money for any contract) got forfeited as they were not able to deliver anything.

    When the author talks about favouritism by the ministry towards PSU's, providing order on nomination basis and the cost factor, then Why doesn't the author of this post care to elaborate that just a few months back L&T (the company favoured in this post) lost an order to a PSU in open tendering mode as well and when talking about the cost factor why doesn't the author took time to find out the reason for price difference? Which is not only the ministerial overheads for beurocrats as someone mentioned in the comments, but also the Guarantee Refit part which is a part of the contract and that is not 6month or 1 year like in consumer goods. Now any sane person can estimate the costs involved in building a ship and the cost of spares under guarantee refit.

    When we are doing the comparison then why doesn't the author seem to find out the amount of work done by both the shipyards during COVID period?

    It's very easy to say merge the PSU's with private entities, but the private players must compete first on the levels of technical competence and the service dedication, then only they should start dreaming of taking over these giants. Unless ofcourse, the overheads spends over beurocrats are actually from the private players than what everybody thinks from PSUs.

  7. Why don't you publish the comment that shows your truth?

  8. This comment has been removed by a blog administrator.


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