Private Shipyards are a must - we have no other option actually -
EY study says Indian warshipbuilding capacity grossly inadequate, private yards can step up
With demand in India for new naval platforms such as warships and submarines outstripping the public sector’s capacity to deliver, private shipyards have the potential of scooping up annual business of Rs 25,000 crore over the next 15 years, a report on warship-building capabilities says.
While the government has been working to increase the capacity of defence shipyards, the sheer requirements of the navy – estimated at more than 95 vessels due for acquisition by 2027 – presents a unique opportunity for private shipyards to capture the market, according to the recent report by EY.
Besides, a substantial order for next-generation submarines has captured the imagination of the private sector – Pipavav Defence & Offshore Engineering Co and Larsen & Toubro are in contention for an estimated Rs 80,000 crore of contracts along with Mazgaon Docks Ltd and others. The requirement of the navy and the Coast Guard over the next few years stretches from offshore patrol vessels to amphibious fighting ships.
Comparing the existing and planned upgrade in the capability of India’s defence shipyards, the report says that while at an average, government-owned yards can handle business worth Rs 30,000 crore annually in the 15-year period, there will be a huge gap in supply, leaving private yards with the scope of an annual Rs 25,000 crore business.
“The indigenous construction requires an estimated annual capacity of 107 Standard Ship Units (SSUs) in terms of the annual turnover. But even with a reasonable increase in efficiency, India’s ship-building capacity, as well as the present capacity of defence shipyards, is grossly inadequate to meet even half of projected requirements,” the report says.
Besides the scope for business, a related study by EY suggests that in case the government can implement its ‘Make in India’ plan for the defence forces, savings of at least 20% in terms of capital expenditure can be achieved over the next 12 years in military purchases. This would translate into roughly a saving of Rs 3 lakh crore.
“Considering the country’s cost-saving edge, we can safely assume a saving of above 20% on major defence platforms in case they are produced in India, with or without a joint venture or transfer of technology,” the report says.
This demand has spurred fresh interest in the private sector to invest in shipyards, with the takeover of Pipavav by Anil Ambani’s Reliance Infrastructure Ltd the most recent example. The report identifies leading players in the segment as Pipavav, L&T, Bharati Shipyard Ltd and ABG Shipyard Ltd, which have been able to secure naval orders in recent years.
EY study says Indian warshipbuilding capacity grossly inadequate, private yards can step up | idrw.org
And we are proceeding in the right direction in this concern - Private Shipyards like L&T are being Promoted -
L&T Bags $230 Million Contract to Supply Seven Offshore Patrol Vessels To The Indian Coast Guard
And believe me MDL is still good - Hindustan Shipyard Limited (HSL) is the real headache as of now
but as usual like the privatization of any other government entity - the Privatization of HSL is also being opposed! Battling a paralysing financial situation and with no bank willing to help, the shipyard had to dip into its 'Refurbishment & Replacement of Machineries & Infrastructure (RRMI) funds' just to make available the working capital to complete its ongoing shipbuilding projects.(Actually its pretty disheartening to see the Shipyard which built our first indigenous Nuclear SSBN to be in such a poor state!)
