Larsen & Toubro’s whole-time director and senior executive vice president (defence and smart technologies) J. D. Patil, in this Part 2 of an exclusive interview, tells Defence.Capital editor N. C. Bipindra that L&T holds some of the unique capabilities in the underwater domain that have thus far remained imported in our country.
Ques. What could be the compelling reasons for L&T to bag the futuristic submarine programme of the Indian Navy under the strategic partnership model of the Indian government and why you should ideally be executing this project?
Ans. As a part of the 30-year submarine building plan cleared by the Cabinet Committee on Security in 1999, six submarines under P75 programme were to be awarded on DPSU yard, while the P75(I) programme for six more submarines was to follow in quick succession and awarded to a private yard under the second line of construction.
The plan also mandated subsequent submarines to be indigenously designed and built through both the yards. L&T, with its track record in classified underwater programme, was evaluated as the most competent yard among the private yards/other companies as evaluated by the joint evaluation team of naval professionals as well as the MoD representatives from concerned departments.
While the P75 was awarded on nomination basis to MDL yard in 2005 with some delays, the P75(I) lingered in the ordering pipeline for over one-and-a-half decade and has now finally reached closer to the RFP stage under Strategic Partnership model, mandating the two shortlisted yards to compete.
In a way, this competition brings both the MDL and L&T face-to-face in the competitive bidding process. Both have proven track record in the domain, with MDL having begun building two SSK 209 class of submarines three-and-a-half decades back, and the P75 under execution, L&T has been associated with the classified underwater programme for nearly three decades as prime contractor. Also, L&T’s association with the programme dates to mid-eighties through development of series of platform specific equipment and systems.
The Indianisation (not indigenisation!) in the strategic submarine programme has been extremely high and attained unprecedented levels and in multiples of those achieved in any complex hi-tech defence platforms produced in India, with exceptions of very recent warship building programmes.
L&T, in association and enabled by the programme, has established track record of formidable indigenous capabilities, including in-house development of technologies, processes, jigs and fixtures as well as skill development for indigenous construction of submarine hulls, as well as number of engineering equipment, weapon systems, PGD and control systems, platform integration through Industry 4.0 digital processes.
We established a dedicated submarine design and engineering centre for detailed design and engineering in digital domain, Virtual Reality studio, hull construction and integration using digitally enabled automation.
Our dedicated work centres have been ab-initio developed indigenously and matured to do 3D assisted outfitting as well as quality control, system integration, to system level tests and trials, and proven over decades of our association.
Thus, L&T holds some of the unique capabilities in the underwater domain that have thus far remained imported in our country. Few examples of such capabilities are technologies, processes, methods, and tooling for complete pressure hull fabrication in a range of alloys used in eastern as well as western philosophies of submarine building, torpedo weapon complexes with range of technologies, unique solution for handling of 3,000-ton megablocks, ship lift to handle docking/undocking of vessels up to 21,500 ton in a couple of hours, and manufacturing of range of platform specific equipment.
It is also pertinent to mention here that L&T has achieved unmatched efficiencies by exploiting technology innovation and learning curve benefits through unbroken three decades of engagement and created benchmarks that are well documented with the programme/MoD.
Ques. What are the next big navy or coast guard orders that the L&T is looking forward to, from the Indian government in the immediate future? Similarly, are there any foreign bids that have been placed by L&T?
Ans. As on date, we have bid for Fast Patrol Vessels, Multi-Purpose Vessels, Next Generation Missile Vessels, and the Cadet Training Vessels RFPs, and all are at various stages of evaluation.
We are also participating in the tender for acquisition of Next Generation OPVs and expect a repeat RFP for few Interceptor Boats as replacement for the boats gifted to foreign countries.
With in-house warship design capability, modern shipyard infrastructure and ability to deliver on time/quality, L&T is actively pursuing opportunities in the exports markets. Our vessels are today operational with three countries that the Government of India chose to gift these, having been comfortable with their operational performance.
We are executing a significant export contract and ready to deliver the lead boat and launched the second one, while three more are in various stages of construction concurrently.
It is worth mentioning that given Government of India’s focus on empowering friendly nations, we are concurrently helping the customer’s yard construct these in its own yard with keel for three vessels already ready to be laid.
We are first Indian yard to deliver an indigenously designed and built vessel to United States Navy and deliver another to Ghana Navy recently.
Ques. What is going to be your revised plans for the Indian Navy’s Landing Pontoon Docks project, which will now come up for re-tendering soon? Do you see the possibility of this re-tendering involving the public sector players too in view of lack of much private sector competition for the LPD programme?
Ans. It is extremely unfortunate for the user as well as the industry that the LPD RFP was withdrawn on technical matters, after almost a decade. We have been working on the programme since 2008.
After detailed feasibility evaluation, AON was accorded by the DAC in 2010 as lead programme under the ‘Buy & Make Indian’ Category. After Project Appraisal Committee reviews of detailed project reports by the probable yards, the RFP was issued to three yards that could have built this class of vessels in 2013.
The RFP was amended in 2017 after bankruptcy of one of the bidding yards, while the other being amidst a CDR resolution. The validity of bids was extended multiple times and the RFP has been retracted just because all other competitors to L&T became bankrupt.
We incurred sizeable expenditure in terms of bid design, bid preparation and associated activities, including increasing indigenisation with extra time that we could utilise for till the last commercial bid in 2017.
The design partners and numerous Original Equipment Manufacturers, who had partnered with us for supply of major equipment, have also been disappointed by this retraction. Not using the 2017 bid for award, the cost of acquisition would certainly go up for the MoD, considering the lead time of nothing less than a minimum of two years for the contract award, assuming the RFP is issued within six months.
Therefore, the LPD construction can begin not before end of the Financial Year 2022-23 with commensurate cost escalation due to weakening of the Rupee vis-à-vis global currencies, as well as domestic inflation since 2017.
Besides increased cost of the project, the cost of non-availability of these crucial platforms to the nation would be far higher, given the geopolitical situation we are in and the quantum of Chinese presence in the Indian and surrounding waters that cannot be put down in financial numbers.
While the sole reason for retraction of the RFP was resultant single bid by L&T, it is certain that the RFP would call for competitive bidding with competition from PSU yards. It is interesting that the Project Appraisal Committee and feasibility study done a decade back had concluded that most of the DPSUs did not possess necessary infrastructure to build a ship of over 30,000-ton class besides the complexity of these vessels that make them almost comparable to building an aircraft carrier, unless they create/acquire new infrastructure to be able to build LPDs and qualify the financial and technical criteria defined in Defence Acquisition Procedure 2020.