Project 75I : Unexplained decision to sideline L&T

Images from the Katupalli shipyard, being constructed by L&T in Tamil Nadu. L&T says that Katupalli will be inaugurated by mid-2011

(This is the third article of a four-part series on India's critical, yet significantly delayed, submarine programme)

By Ajai Shukla

Business Standard, 1st Sept 10

Katupalli, Tamil Nadu; and Hazira, Gujarat

Near Ennore, an hour’s drive north from Chennai, a stream of dump trucks ferrying boulders from mines in Andhra Pradesh marks the site of Katupalli shipyard, the centrepiece of L&T’s audacious diversification into warship building. Curving into the ocean like giant pincers are the two arms of what will be a 4-kilometre long breakwater, keeping out the choppy Bay of Bengal from a lagoon calm enough for shipbuilding. The pincers extend steadily as the dump trucks drive to the end and tip out their loads; some two million tonnes of boulders will finally go into the breakwater.

Elsewhere in L&T’s 1225-acre facility at Katupalli, hundreds of engineers and workers labour round the clock, three shifts a day, building a giant ship-lift capable of lifting a 14,000 tonne ship --- the Indian Navy’s largest destroyers are just 6,800 tonnes --- clear out of the water and onto one of several dry docks where vessels can be serviced at leisure. Rows of massive workshops, some 250 metres long, have almost been completed. By June 2011, says L&T --- and the engineering giant does not miss many deadlines --- Katupalli will be commissioned as India’s biggest defence shipyard.

Given this Rs 3500 crore statement of intent from L&T; its state-of-the-art facility at Hazira, which builds hull sections for India’s nuclear submarines; and the company’s experience as the prime integrator of INS Arihant, India’s first nuclear-powered, ballistic missile submarine, there is outrage within L&T at being sidelined by the MoD in Project 75I, which involves the construction of six conventional submarines for the Indian Navy.

In this ongoing series on submarine production, Business Standard has reported the MoD’s decision to build two Project 75I submarines abroad, in the shipyard of a foreign technology partner, and the remaining four in MoD-owned shipyards, Mazagon Dock Limited, Mumbai (MDL), and Hindustan Shipyard Limited, Vishakhapatnam (HSL).

L&T’s Chairman and Managing Director, AM Naik, told Business Standard, “We are extremely concerned that our engineering expertise, our facilities already set up at Hazira in line with our commitment to serve the national interest, and our experience in building submarines will be grossly under-utilised if such a decision were to be implemented.”

L&T sources stress that the company’s experience of building the INS Arihant --- at 5000 tonnes, thrice as large as the average conventional submarine and significantly more complex --- has given the company the expertise, the facilities and the confidence to build conventional submarines faster and more cheaply than any MoD yard. The MoD, allege these sources, is giving the Project 75I submarine contract to its own shipyards to keep them in business.

In 1999, the government had sanctioned a 30-Year Submarine Construction Plan, for building 24 conventional submarines in India. Two construction lines were approved: one based on western technology (Mazagon Dock’s ongoing Project 75 to build six Scorpenes); and a second construction line building six submarines with Russian collaboration. After that 12 indigenously designed submarines were to be built.

L&T sources assert that, over the preceding decade, the MoD and the Indian Navy had conveyed repeated assurances that the second submarine construction line would be set up by L&T at Hazira, in partnership with Russia.

According to Naik, “To implement this, a committee was constituted, headed by an MoD joint secretary, and comprising members from the Indian Navy and MoD. After assessing the capabilities of all shipyards, as per our understanding, the committee cleared L&T Hazira in 2001 as the second line for submarine construction.”

But if the MoD cleared L&T’s Hazira facilities in 2001, another MoD committee in 2008 found Hazira unsuitable for constructing submarines on the grounds that the water draft was too shallow. L&T counters that the nuclear submarine hull sections were built here; and that Hazira builds and ships out petrochemical reactors that are bigger and heavier than a conventional submarine.

The MoD committee also rejected Katupalli, which it visited when construction work on the shipyard had just begun in 2008. By next year, Katupalli will be ready, says L&T; while the MoD admits that Project 75I cannot be sanctioned before 2014-15. But Katupalli has been ruled out based on the situation in 2008.

The MoD’s Secretary for Defence Production, RK Singh, admits that L&T’s experience in submarine building needs to be tapped by the MoD. “We will find some role for L&T… it has capabilities that are very important for us,” RK Singh told Business Standard. “But this will have to be done in a transparent manner, allowing other private sector shipyards to compete as well.

Flip-flop on Hazira

Oct 2000 : Indian Navy officers and Russian specialists accept Hazira for building Amur class submarines.

Dec 2001: Indian Navy and Mazagon Dock officials visit Hazira to evaluate the technology required for Amur construction.

Sept 2004: L&T proposes JV with Mazagon Dock to construct submarines

Oct 2007: Secretary, Defence Production tells a CII delegation that L&T would get the second submarine line.

Aug 2010: MoD sidelines private sector shipyards from second submarine line