Negotiations collapse in Indian minesweeper project
Gordon Arthur / Hong Kong
The Indian Navy’s (IN) quest to build 12 mine countermeasure vessels (MCMV) under an INR328 billion ($5.2 million) ‘Make in India’ programme has collapsed at the final hurdle.
Goa Shipyard Limited (GSL) was supposed to build the dozen 800t minesweepers with 60% indigenous content with support from the Kangnam Corporation based in Busan, South Korea after the latter had been selected as the overseas partner in 2015.
However, negotiations over pricing and technology transfer recently ground to an abrupt halt.
On 7 January the Hindustan Times quoted GSL chairman Shekhar Mital as saying, ‘We were unable to resolve commercial complications despite our best efforts. This particular deal with the Koreans is off.’
The MoD will now have to reissue an RfP as part of a global tender for these minesweepers. This will be the third time that India has launched such an MCMV effort. Previously, negotiations with the Kangnam Corporation for eight MCMVs were scrapped in 2015 after allegations of the company’s use of middlemen.
Construction was supposed to have commenced in April, with deliveries from 2021-26.
The IN currently has just four remaining Karwar-class MCMVs (pictured above) from the USSR that entered service from 1986-88, and these 817t vessels are due to be decommissioned between 2018 and 2020.
Given that the tender has to return to the starting line, the IN will end up with no minesweepers in service for an indeterminate number of years beyond 2021.
It is estimated that the navy needs at least 24 such vessels to protect harbours and coastal areas around India.
Kangnam and Intermarine are likely to bid in a rerun of the MCMV tender.
India is not the only nation to suffer a setback to its minehunter programmes, with Taiwan cancelling a six-ship contract with local firm Ching Fu Shipbuilding in mid-December due to a serious financial crisis. Taiwan’s first vessel is being built by Intermarine in Italy.