October 28, 2015

Defence ministry set to decide on ABG and Pipavav capability

Private shipyards ABG and Pipavav are keeping their fingers crossed as the defence ministry is set to decide whether they have the financial and technical capability to handle a Rs 20,000-crore contract for the construction of amphibious fighting ships for the Navy.  The two yards, which had been shortlisted along with L&T for a navy order for four Landing Platform Dock (LPDs), have recently faced corporate debt restructuring and changes in management, prompting a 'capacity assessment' report ordered by the Defence Ministry.
Sources told ET that while the Navy, which carried out the in depth assessment of the financial stability of the yards, has given them a go ahead for the 'Make in India' contract, a final decision would be taken by the defence ministry shortly. If both yards are cleared by the MoD, the next step would be the opening of commercial offers of the three yards, with the winner being decided on the basis of lowest price offered. While L&T had tied up with Spain's Navantia, Pipavav has a pact with  French DCNS and ABG with US-based Alion.


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