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MoD rules out Adani; MDL and L&T get approval to make submarines in India

Last Updated 21 January 2020, 15:04 IST

The Defence Ministry has torpedoed the Gujarat-based Adani Group's much anticipated entry into big-ticket defence manufacturing as it cleared only two Indian vendors – Mazgaon Dockyard Limited and Larsen and Toubro – to partner with foreign firms to manufacture six conventional diesel-electric submarines at an Indian yard.

The Defence Acquisition Council headed by the Defence Minister Rajnath Singh cleared the names of MDL and L&T for the Rs 45,000 crore project at a meeting here on Tuesday. This was also the first DAC meeting attended by the Chief of the Defence Staff Gen Bipin Rawat.

Sources said the Adani proposal was not presented before the DAC as an empowered panel within the Defence Ministry had earlier rejected it on the eligibility ground. The controversial group, which did not have any experience on submarine building, tied up with state-owned Hindustan Shipyard Limited, Visakhapatnam for the bid.

The five foreign vendors in contention are Rosoboronexport (Russia), Naval Group (France), Daewoo (South Korea), ThyssenKrupp Marine Systems (Germany) and Navantia (Spain).

As per the Narendra Modi government's Strategic Partnership initiative, they would have to join hands with one of the Indian companies to make these submarines in India.

“The DAC approved shortlisting of Indian strategic partners and the potential original equipment manufacturers that would collaborate with SPs to construct six conventional submarines in India. The SP model also aims at promoting India as a manufacturing hub for defence equipment,” the Defence Ministry said in a statement.

Behind the original schedule by years, the project (P-75I) kicked off a fresh row last week when there were reports on the alleged involvement of the top brass of the government to overrule the empowered committee and make the Adani Group eligible.

"Adani Defence has ‘zero experience’ of making ships or submarines. It seeks to manufacture submarines based on a clause wherein its experience of setting up and running a power plant is counted,” Congress chief spokesperson Randeep Singh Surjewala had stated last week, urging the government to clear the air.

India is critically short of submarines. Way back in 1999, Indian Navy planned to acquire 24 diesel electric submarines over the next 30 years. Even though the plan and the deadlines were modified twice later, the targets set up in the 2008-2022 indigenisation plan is way off the mark as Indian Navy currently operates 14 diesel electric and two nuclear-powered boats.

The government has approved mid-life refit for six old submarines.

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(Published 21 January 2020, 15:04 IST)

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