1 week Ago By Bloomberg
The South Asian nation’s bid to build six conventional diesel-electric subs is now delayed by a year and further delays are expected, according to two senior officials direct aware of the situation who asked not be identified because the information isn’t public. The development is more than a setback to India’s efforts to upgrade its military: the project also represents a test of Prime Minister Narendra Modi’s new defence acquisition policy. That policy requires foreign manufacturers to partner and provide local firms with technology to build military hardware in India, the world’s largest weapons importer.
German defence manufacturer ThyssenKrupp Marine Systems, in partnership with India’s state shipyard Mazagon Dock Shipbuilders Ltd., and private shipbuilder Larsen & Toubro Ltd. with Spain’s Navantia SA, are competing for the project.
Mazagon shares tumbled more than 2 per cent in India trading, extending losses that reached 4.4 per cent, after news of the delay was reported. State-run shipbuilders including Garden Reach Shipbuilders & Engineers and Cochin Shipyard Ltd.
also fell. About a half-dozen objections were raised by local contractors as the navy came close to picking a winner following crucial field trials in June of some of the key technologies needed for the subs, the people said, without naming the companies involved. Each objection will need to be investigated before the process can proceed.
Complaints ranged from alleged violations of proper procedures to unclear guidance about how to conduct the sea trials, the people said. The nature and timing of the complaints raise questions about whether contractors are trying to stall the project because they fear losing out, the people added..
