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July 16, 2015

Russia selects Anil Ambani’s Pipavav to make frigates for Indian Navy


The Russian government has chosen Anil Ambani’s Pipavav shipyard for a ‘Make in India’ naval frigate order that is likely to exceed $3 billion, making it the private sector’s biggestever warship-building project.
With public sector shipyards tied up in executing current orders and the Indian Navy battling to increase fleet strength, the government has been in advanced talks for the past several months with Russia for three to four upgraded Talwar class frigates, classified as Project 11356 vessels.
Moscow, which has been keen to build the frigates at a Russian shipyard, was firmly told last year that the order would only be placed through the Make in India route but it would have the flexibility to choose an Indian partner for the project.
After an evaluation of several Indian shipyards, including that of Larsen & Toubro, Russia has formally informed the defence ministry that Pipavav has been chosen as its Indian partner for the project. Officials said a formal letter was sent by Federal Service for Military Technical Cooperation (FSMTC) director Alexander Fomin last week confirming the partnership.
The record deal is the first one landed by Pipavav after it was taken over by Anil Ambani’s Reliance Group recently. The contract for the new frigates is likely to be in the form of a government-togovernment order with Russia and could be signed this financial year with delivery expected over the next six to eight years. Vice-chief of naval staff, Vice-Admiral P Murugesan, has confirmed that exploratory talks have been on and, when decided, the frigate order will be under the Make in India initiative.
The project brings together two of the government’s key themes. Prime Minister Narendra Modi announced the Make in India initiative on August 15 last year as part of a manufacturing push to create jobs, raise incomes and help boost the economy. The government is also keen on greater private sector participation in defence, having eased overseas investment rules in this regard.
The new stealth frigates will be a vital addition to the navy’s surface fleet that is fast being upgraded to meet security challenges in the region. India has already bought six Russian-built Talwar class frigates, the last of which was delivered in 2013.
A team led by Russian deputy industry and trade minister Alexei Rakhmanov has been evaluating Indian shipyards for the project over the past few months. Among the yards visited were Mazgaon Dockyard Ltd, Cochin Shipyard Ltd and the L&T unit, with the final selection being based on the availability of infrastructure and capacity. Pipavav, which is currently executing a naval offshore patrol vessel order, has India’s largest shipbuilding facility.
When contacted, a Reliance Group spokesperson said, “We are fully committed to the Make in India vision of our Prime Minister. Our mission is to build higher capabilities at the world-class facility that we have, to be able to serve the complete requirement of the Indian Navy.”
While Russia’s United Shipbuilding Corporation (USC) did not respond to a detailed questionnaire, one of its top executives told ET earlier this month that it was open to working with a private shipyard on the order. “We are ready to transfer technology to ensure the construction of these ships in India. The new ships that will be built will be different and more modern from the Talwar class that have been delivered,” Alexi Dikiy, director for military technical cooperation at USC, had told ET.

economictimes

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