November 17, 2014

Deal for S Korean minesweepers to be scrapped

India is all set to scrap the long-pending deal for South Korean mine countermeasure vessels (MCMVs), which are highly-specialized smallish warships that detect, track and destroy enemy mines to keep shipping traffic safe, due to allegations of agents having vitiated the entire selection process.

Instead, in recognition of Navy's critical operational requirement for MCMVs, the defence ministry will "nominate" defence PSU Goa Shipyard (GSL) to build eight such specialized vessels with foreign collaboration through a fresh tender soon.

With defence minister Manohar Parrikar on Sunday returning to New Delhi from Goa, where he visited GSL and held talks with top officials, sources said the final decision to scrap the original MCMV tender is "likely in the next few days".

It was under the UPA-2 regime that the final price negotiations with South Korean company Kangnam Corporation had concluded in October 2011. Under it, two MCMVs and transfer of technology were to be acquired from Kangnam in a deal worth Rs 2,700 crore, with Goa Shipyard building another six such vessels for over Rs 6,000 crore.

The inking of the deal, however, was kept on hold due to the allegations swirling around it. Now, attorney general Mukul Rohatgi has recommended scrapping of the entire selection process for the MCMVs, which began way back in July 2005, since Kangnam hired agents to facilitate the deal. The MoD has already "encashed" the Rs 3 crore bank guarantee furnished by Kangnam under the pre-contract "integrity pact", as was earlier reported by TOI.

"Under the new tender or RFP (request for proposal), all the eight MCMVs will now be built in India by GSL. The defence shipyard will tie up with a foreign collaborator, which can include Kangnam since it's not being blacklisted," said a source.

The Navy has repeatedly sounded alarm over delays in the acquisition of MCMVs, down as it is to just seven ageing Karwar and Pondicherry-class of minesweepers for both the east and west coasts when it needs 24 to be comfortable. They have become all the more important due to the increasing forays of Chinese submarines, which can easily lay mines, into the Indian Ocean region.

Just last week, Navy chief Admiral Robin Dhowan again stressed the "urgent need" for MCMVs. "They are required to keep our harbours open and safe in the event of hostilities. The government has to take a decision since our force-levels of minesweepers/mine-hunters has gone down drastically," he said.

Underwater mines, which are cheap and relatively easy to plant, can create havoc by choking up harbours. The around 1,000-tonne MCMVs are used to "clear" harbour approaches or departure routes as well as offshore installations for shipping activity. With high-definition sonars, acoustic and magnetic sweeps, these specialised vessels can detect marooned and drifting mines. They then use remote-controlled systems like small underwater vehicles to then detonate the mines at safe distances. 
- timesofindia

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