With the Navy looking forward to induction of various new Naval vessels in coming years in order to keep the dipping operational efficiency/numbers at desirable level, it has become imperative for the Government to involve the private sector shipyards. These shipyards have requisite infrastructure, hi-tech facilities and have the capabilities to undertake manufacturing of world class complex Naval ships/vessels.
The Indian Navy's Maritime Capability Perspective Plan (MCPP) 2005-2022, envisages its force-levels not to dip below the existing 127 warships, 65 of which are major combatants like aircraft carriers, destroyers, frigates and corvettes and 13 conventional submarines. The navy has barely half the submarines, destroyers and frigates it needs. However, keeping in mind the present inventory and their shelf life and also the orders already placed, it is expected that the Navy will fall short of achieving the desired numbers. Taking into consideration the vintage of the current fleet of vessels with the Indian Navy, it is evident that it is facing an acute problem of high average age of all type of vessels, more so of submarines. The prescribed or design life of most of the major Naval vessels is 25 to 30 years. However, about 46 percent of the vessels are above 30 years. The Fig depicts the shelf life of the major platforms with the Indian Navy.
Projection of Estimated Force Level
|Platform||Projected/ Requirement||Held||On Order||De-inductions||Deficiency|
|Destroyers/ Frigate||37-42||26||17||8-10||6-8 Frigates & 3-5 Destroyers|
|LND / MCMV/ FSS||20+24||5+7||9+8||5+7||11+18|
|LPD / LCU||6+16||1+6||0||1+6||6+16|
The need to have a credible naval vessel force is recognized by the defence establishment as the existing inventory has been depleting at a very fast rate. The focal point of the Indian Navy's modernization plan revolves around the acquisition of ships/vessels, submarines and also strengthening its aerospace arm. Table gives a projection of the estimated force level requirements of major naval platforms including submarines and related capital work projects.
Bearing in mind the requirements and procurement programmes of ships/vessels and aerospace platforms in pipeline, it is expected that the Navy will be spending approximately Rs 847000 crores over the next 15 years or so on various maritime systems. Amongst all the naval submarkets, the naval fleet accounting of 53 percent of the total maritime systems is the major segments that is bound to see substantial growth in coming years owing to the present depleting and aging fleet. Recently the Government has come out with major corrective actions to address the depleting naval vessels of the Navy. These being:
- Acceptance of Necessity for a service life extension programme for 6 existing submarines (4 of the Sindhugosh class and 2 of the Shishumar class). The service life extension programme will ensure their availability for at least another decade and will temporarily fill the gap till the new submarines are inducted.
- Acceptance of Necessity for construction of 6 submarines under Project 75(I) by Indian Shipyards through technology transfer arrangement with a foreign submarine manufacturer after a prolonged delay of 7 years.
- Acceptance of Necessity given for construction of four Survey ships worth Rs. 2,324 crores to be build indigenously by private sector
- DAC clearance for the procurement of two midget submarines.
- The Government recently in July 2015 has issued a letter seeking the Expression of Intent (EoI) has been issued in July 2015 to 9 Indian shipyards which include four private sector shipyards - L&T, Pipavav, ABG and Bharti and five public sector shipyards - Mazagon Docks Limited, Garden Reach Shipbuilder and Engineers, Hindustan Shipyards Limited, Cochin Shipyard Limited and Goa Shipyard Limited for construction of indigenous aircraft carrier-2 (IAC-II) which is expected to cost Rs 10 Billion approx.
- The Government has also bought the contract worth $3 Billion to build Grigorivich frigates (Project 11356) under which three to four upgraded Talwar class frigates are to be build for Indian Navy under “Make in India” route. But it gave the flexibility to let the OEM (Russia) choose an Indian partner for the project. And recently, it has been reported that Russia has chosen India's Pipavav Defence to partner for this project.
The overall requirement and resources projection till 2027 is expected to be as under:-
The capital expenditure on the Indian naval fleet has been witnessing an upward surge year on year and is expected to grow at least 10-11 percent every year. Fig depicts the capital expenditure earmarked towards naval procurements for the XII plan and also further projections for XIII and XIV plans. The Naval capital submarket mainly comprises of Naval Fleet, Naval Dockyards, Aircraft and Aero Engines, Heavy and Medium Vehicles and Other Equipments. The capital acquisition of naval ship and platforms account for 53 percent of Indian Navy's capital acquisition budget and this is expected to grow at least 10 percent every year.
The Ministry of defence has recently come out with 'Indian Naval Indigenization Plan 2015-2030' which is aimed to enable the development of equipment and systems through the DRDO and the Indian Industry over a 15-year period.
The indigenisation plan particularly focuses on to opening up the opportunities for private sector and inviting the Indian industry to produce locally, what the navy has been importing. Also there is a requirement by the Navy for fully digitized integrated platforms.
|Category||Type of Equipment|
|Float Category||Arrestor Wires for Flight Operations on Aircraft Carriers; Aircraft Lifts; Items for Replenishment at Sea (RAS) Operations; Composite Superstructures; Long life Paints for Underwater Hull, Flight Deck and Radar Absorption; Composite Foldable Aircraft Hangar Door; Bow Sonar Dome; Glass for Windows on Ships’ Bridge.|
|Move Category||Gas Turbines (11-15 MW and 20-25 MW); Main Propulsion Diesel Engines; Marine Gearboxes (1-50 MW); Shafting; Propellers – Both Fixed and Controllable Pitch; CFC Free Fire Fighting Systems for Magazines and Machinery Spaces; Air Independent Propulsion (AIP); Steam Generation Equipment; Canned Motor Pumps.|
|Fight Category|| Surface to Air Missile; Surface Surveillance Radar; Air Early Warning Radar.
Satellite Communication System (SATCOM); Aviation Control Suites; Fire Control Systems; Integrated Mast & Control System for Submarines; Mine Hunting and Portable Diver Detection Sonars; Light and Heavy Weight Torpedoes; Towed Array Sonars; UAVs/ Remotely Operated Vehicles/ Autonomous Underwater Vehicles.; GPS, Inertial Navigation Systems; Super Rapid Gun Mounts (SRGMs).
|Aviation Equipment||Naval Utility Helicopters (NUH); Naval Multi Role Helicopters (NMRH); Deep repair facilities for older generation aircraft TU 142M, IL-38, Seaking and Kamov etc.|
|Diving & SOVs||Night Vision Equipment(NVF) with advanced optics; Diving sets with Full Face Masks; UAVs and Micro UAVs; Underwater Diver Lamps.|
|Submarines||High Density Valve Regulated Lead Acid Batteries; Main Motor Generators.; Propulsion Motors; Non hull penetrating Submarines masts; Optics for Submarine masts; Integrated Sonars.|
Existing Capacity in Warship Production
As per Indian Navy's long term plan over 95 ships including 24 numbers of submarines are due for acquisition by 2027. Indigenous construction of these assets requires an estimated annual capacity of 107 Standard Ship Units (SSUs). The combined capacity available in the 03 DPSU shipyards is presently for construction of only 39.25 SSUs. If the requirement of the Coast Guard (158 ships till 2017) is also included the gap in Strategic warship building capacity further widens. Thus it is evident that demand exists for Warship building Capacity and repairs. This will necessitate increased ship building capacity in India as the present capacity of defence shipyard is hardly adequate to meet even half of the projected requirement. Refer to diagram from planning commission report on Warship Turnover in 12th plan.
Till now only four DPSU shipyards Mazagon Docks Limited (MDL), Garden Reach Shipbuilding & Engineering (GRSE), Goa Shipyard Limited (GSL) and the recently acquired Hindustan Shipyard Limited (HSL) has been tasked with the responsibility of naval warship building. Construction of frigates, destroyers and other larger ships in the past has been limited to MDL and GRSE, while the other two shipyards GSL and HSL are engaged in building only smaller vessels. A total of more than 100 ships have been constructed by all the mentioned yards so far and 46 ships have been ordered and are under construction. Amongst all the public sector shipyards, only Cochin Shipyard Limited (CSL) and Hindustan Shipyard Limited (HSL) have the required capacity and infrastructure to build large vessels of 1.1 lakh DWT, and 80000 DWT respectively. Apart from these shipyards the only other PSU shipyard which has been successful in getting a major naval shipbuilding order in recent years is the Cochin Shipyard which has been assigned to build the first indigenous aircraft carrier INS Vikrant.
Demand and Capacity Gap
The intended induction programme is structured to continue at a pace such that we expect to induct ships and submarines at an average rate of 5 platforms per year. However keeping in view the Indian Defence Shipyards past record and even with capacity expansion, they will not be able to deliver. The table gives the estimates of the total order value of naval procurements in next 15 years. Thus, there exists a huge gap between the demand and capacity which will continue to grow unless measures are taken. Hence it offers significant opportunities for the private shipyards to capture.
Short by 61 warships, the navy currently has 48 vessels under construction. In addition, The Defence Ministry has accorded Acceptance of Necessity for another 44 vessels. Over the coming two decades, while these 92 vessels are built in various Indian warships, large numbers of older warships would be decommissioned at the end of their service lives. While decommissioning can be delayed to some extent, the navy will still be well short of 198 vessels by 2027.
Total Acquisition Costs: 15 Years
|Platform||Total Order Value (Crores)|
|Grand Total of Ongoing and New Programmes||> 847000|
|Average Yearly output Required over 15 years||~ 56466|
|Average Spending capacity of Shipyards||11000 Crores/Year|
More so as on date the major chunk of orders still lies with Government shipyards that are overburdened and loaded for next 4-5 years and thus are not able to complete the orders within the time frame and only a nominal share with the emerging private shipyards (Refer Fig). To overcome this gap there is a requirement of involving the private shipyards in all future submarine acquisition programmes of the Indian Navy.
|Kolkata Class Destroyers (P15B) ( 35000)||MDL|
|Landing Craft Utility (2200)||GRSE|
|Frigates (P17A ) ( 26000)||MDL|
|Frigates (P17A) ( 19,500)||GRSE|
|Minesweepers ( 2250)||GSL|
|Offshore Patrol Vessels (1650)||GSL|
|NTRO Vessel ( 500)||HSL|
|NOPV ( 2,500)||PSL|
|Cadet Training Ships (900)||ABG|
|Interceptor Boats ( 975)||L&T|
|Fast Patrol Vessel (1400)||CSL|
|Fast Speed Boats (175)||BSL|
|Technology Demonstration Vessel (300)||BSL|
Private Sector Participation
Estimations show that though more in number these privately held shipyards have an established capacity of about 27000 DWT and few more with even limited capacity but some expansion plans are now visible in this direction and they are catching up in this respect. The leading players in this segment include Pipavav, L&T, Bharati and ABG shipyards which have been able to secure naval orders in recent years. Amongst these, Pipavav, ABG, and L&T Shipbuilding Ltd have been able to secure defence license for shipbuilding and secured some defence orders.
With the growth opportunities now arising in indigenous shipbuilding owing to 'Make in India' initiative by the Government, it is expected that there would be active participation from their end in the coming years. A MoD committee, with representatives from the Navy and MoD, conducted a survey of shipyards and short listed Garden Reach Ship-Builders, Hindustan Shipyard, Goa Shipyard, L&T, Mazgaon Docks, ABG Shipyard and Pipavav Shipyard for issue of EoI for Project 75I. The shortlisted shipyards will now be invited to submit bids, in partnership with a foreign shipyard that meets the navy's specifications for the submarines.
The recent acquisition of Pipavav Defence and Offshore Engineering Company Limited (PDOC) one of the major private shipyards by the Reliance Infrastructure, together with sole management control substantiates the fact that the private sector companies are looking forward to this arena and tap the growing opportunities which till date were with the defence shipyards. Recently, in a first for a private Indian defence company, PDOC has signed an agreement with JSC Ship Repairing Centre Zvyozdochka, Russia, for Medium Refits and Life Certification of 877EKM Submarines in India. The indicative value of work proposed to be undertaken by the proposed JV is approx. Rs 11,000 crore. This though is just a beginning as more such mergers and acquisitions and tie-ups are expected in future.
With public sector shipyards tied up in executing current orders, the recent initiatives by the Government's end with regards to giving opportunities to private sector seems to be the right direction in not only maintaining and augmenting the naval fleet but also developing a strong ship building manufacturing base in the country which has been lacking till date. The Defence Ministry should now ensure that more such timely and requisite steps should be taken to fasten the induction of new vessels which are need of the hour to keep the operational efficiency at desirable level.