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Adani Group joins bidding race for Rs 45,000 crore Make in India submarine project

Larsen and Toubro, Mazagon Dock Shipbuilders Ltd, Reliance Naval and Engineering Ltd and Hindustan Shipyard have already submitted initial bids for the Indian Navy project for building six conventional submarines. This is the largest ongoing Make in India initiative in the defence sector.

twitter-logo BusinessToday.In        Last Updated: September 12, 2019  | 13:56 IST
Adani Group joins bidding race for Rs 45,000 crore Make in India submarine project
Adani Enterprises, the flagship company of the Adani Group, reported over three-fold jump in its consolidated net profit at Rs 601.20 crore for the June quarter

The Adani Group is hoping to get shortlisted as a potential Indian strategic partner for the Rs 45,000 crore Indian Navy submarine construction project. The billionaire Gautam Adani-led conglomerate submitted a last minute bid for the project, which is the largest ongoing Make-in-India initiative in the defence sector, The Economic Times reported.

In June, the Modi government had invited Expressions of Interest (EoIs) from Indian companies for the indigenous construction of six conventional submarines in collaboration with the yet-to-be-finalised Original Equipment Manufacturer (OEM). This is the second such project undertaken under the latest Strategic Partnership (SP) Model where private players are invited to bid for a major defence contract, following the procurement of 111 Naval Utility Helicopters (NUH).

The much-talked about Naval project was expected to be a close contest among traditional contenders such as Larsen and Toubro (L&T), Mazagon Dock Shipbuilders Ltd (MDL) and Reliance Naval and Engineering Ltd, which have already submitted their initial bids. The Adani Group's decision to join the race also comes as a surprise since it does not currently own an active shipyard, something all the above-mentioned rivals have in common.

Sources in the know told the daily that the Gujarat-based group could float a special purpose vehicle (SPV) with state-owned Hindustan Shipyard (HSL), which has experience in submarine repairs and overhauls. While HSL has also put in a standalone bid, MDL, the other defence PSU in the running, is expected to be the frontrunner given its experience in building the Shishumar class of submarines as well as the current production line for the Kalvari class of boats.

Over the next two months, the defence ministry will scrutinise the bids to shortlist qualified Indian contenders. "The Indian companies would be shortlisted based on their capability for integration of system of systems, expertise in shipbuilding domain and the financial strength. The OEMs would be shortlisted primarily based on their submarine design meeting the Indian Navy's Qualitative Requirements and qualifying the Transfer of Technology and Indigenous Content (IC) criteria," the ministry said in a statement in June.

Among the OEMs its a five-way contest to land the deal - foreign partners from Russia, France, Germany, Spain and Sweden have already expressed interest. The formal tender for the contract is reportedly expected by the end of the year. The winning bidder is unlikely to be awarded the contract before 2021.

Also read: India to spend Rs 13,000 crore for military modernisation in next 5-7 years

Also read: Defence production: Revenues of private companies rise faster than DPSUs

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