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Project-75 (India) submarine acquisition project

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Project-75 (India)
Submarine procurement initiative of the Indian Navy.
Class overview
Builders
Operators Indian Navy
Preceded byKalvari class
Cost₹43,000 crore (equivalent to ₹480 billion or US$5.6 billion in 2023)
Planned6
General characteristics
TypeAttack submarine
Propulsion
NotesCapable of conducting -

Project-75 (India), simply referred to as the P-75(I) program, is a military acquisition initiative affiliated to India's Ministry of Defence (MoD), aimed at the planned procurement of diesel-electric submarines for the Indian Navy (IN). Originally conceived in 1997, the initiative's objective has been to procure a class of six conventionally-powered attack submarines for the Indian Navy Submarine Arm, as a replacement for the force's Sindhughosh-class submarines.[2]

Under the requirements of the program, the submarines are to be procured from an international naval firm and are to be contract-built at a chosen Indian shipyard, in accordance with the country's Make in India initiative.[3][4] The aforementioned vessels are envisaged to feature multifarious capabilities - particularly that of anti-surface warfare, land-attack capability and air-independent propulsion.[5][3]

Initially envisaged in the late-1990s as part of a 30-year long-term scheme to replace the IN's existing conventional submarine fleet, the program has experienced multiple delays owing to hurdles emanating from bureaucratic red tape, inadequate planning and a lack of corporate competitiveness, causing longstanding delays to the program's timeline, which has consequently led to intense criticism.[6][7] Originally planned to enter operational service in the late-2020s, the six submarines are now expected to be delivered by the mid-2030s.[8]

History

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Origins

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In 1997, the Cabinet Committee on Security (CCS) - the highest-decision making body of India's Ministry of Defence (MoD), approved the construction of two Type 209/1500 attack submarines (SSK) at a then-estimated cost of INR ₹700 crore.[9] This effort, which was conceived in the wake of an international corruption scandal related to India's acquisition of the Shishumar-class submarines, called for the construction of two Type 209/1500 SSKs at Mazagon Dock Shipbuilders Limited (MDL) with the assistance of a foreign naval firm in a corroborative role.[9] In accordance with the scheme, the Indian Navy (IN) and MDL approached several naval enterprises for assistance; however, the French-based Thomson-CSF (TCSF) was the only firm willing to participate.[9]

Two years later, in 1999, the MoD approved a two-phase plan to build 24 submarines over a 30-year period.[9] For the first phase, which called for the construction of SSKs at MDL, two options were proposed: the former option recommending the construction of the Type 209/1500 at MDL with the assistance of TCSF; the latter option recommending the construction of SSKs based on the newer Scorpène submarine design.[9] Ultimately, the IN chose the latter, reasoning that the Scorpène, which had been offered with a provision of technology transfer (TOT), was more advanced than the Type 209/1500.[9] The initial plan to ally with TCSF was dropped in April 2001 and negotiations for the procurement of the Scorpène design under the first phase, dubbed Project-75 (P-75), began in November 2001.[9] The Scorpène design was offered by another French-based naval firm, Armaris (later DCNS, now Naval Group).[9]

The second phase, dubbed Project-75 (India) or P-75(I), was to be executed simultaneously alongside P-75, with both projects envisioned to deliver 18 SSKs by 2030.[10] However, financial constraints within the MoD led to P-75 being the only project sanctioned, with a target to build six submarines.[11]

Progress

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2008-2010

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In 2008, the IN issued a request for information (RFI) to multiple naval firms, namely, Armaris, Howaldtswerke-Deutsche Werft (HDW), Rubin Design Bureau and Navantia to inquire about a possible acquisition of submarines equipped with specific features.[12][13]

In July 2010, the P-75(I) initiative received its first official in-principle approval, termed an Acceptance of Necessity (AoN), from the Defence Acquisition Council (DAC) - the MoD's apex body on arms acquisitions.[14] The DAC, then chaired by minister of defence A. K. Antony, had originally planned to build three of the six submarines at Mazagon Dock Limited (MDL) and one at Hindustan Shipyard Limited (HSL) with foreign assistance whilst procuring the remaining two submarines directly from a foreign vendor or from a private Indian shipyard, at a total budget of INR ₹50,000 crore (equivalent to ₹1.1 trillion or US$13 billion in 2023).[15] However, the Indian Navy, which preferred the participation of private shipyards over public ones, disagreed with the DAC's plan.[14] The difference in opinion between both parties over the initiative's path led to a two-year period of stagnation, during which the AoN expired twice.[16][17]

2011-2020

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The MoD refreshed the AoN in 2013.[18][19]

In October 2014, the Defence Acquisition Council (DAC) revived the initiative under a new mandate to build all six submarines in India with foreign assistance at an estimated cost of ₹53,000 crore (equivalent to ₹850 billion or US$9.9 billion in 2023).[5] Alongside MDL and HSL, two state-run shipyards - Cochin Shipyard Limited (CSL) and Garden Reach Shipbuilders & Engineers (GRSE) and two private shipyards - Larsen & Toubro Shipbuilding (L&T) and Pipavav Shipyard Limited, were invited to participate in the bidding process. The clearance was provided along with the Swimmer Delivery Vessel midget submarine programme of the Navy.[20][21]

In 2017, the IN issued another RFI, this time to Naval Group, Navantia, Rosoboronexport, Saab Kockums, ThyssenKrupp Marine Systems (TKMS) and Mitsubishi Heavy Industries (MHI).[22] Out of the aforementioned six, only Navantia and Mitsubishi failed to respond within the deadline.[23][24]

Strategic Partnership policy

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From top to bottom: Navantia and ThyssenKrupp.

In May 2017, the DAC introduced a unique set of regulations for the procurement of specific sets of weaponry, titled the Strategic Partnership (SP) policy.[25] Under the policy, an Indian private sector firm appropriately sanctioned beforehand by the MoD would have to ally with a foreign original equipment manufacturer (OEM), also sanctioned by the MoD, to contract-manufacture particular articles of weapons, including submarines.[26] Accordingly, in any arm acquisition process sanctioned under the SP policy, the foreign OEMs would be shortlisted by the MoD on the basis of qualitative requirements, while the Indian firms would be shortlisted on the basis of technical, financial and infrastructure-related parameters.[26] Post the selection process, the Indian firm would have to partner with the OEM to compete in the competition's bidding process; the alliance which quotes the lowest price would be declared the winner of the competition.[26]

In June 2017, the MoD announced that the P-75(I) initiative would be the first-ever arms acquisition project to be progressed under the SP policy.[27] After the project's AoN expired for a final time in February 2018, the DAC renewed it with a budget of INR ₹40,000 crore (US$4.7 billion) in January 2019.[28][29]

In April 2019, the IN issued an expression of interest (EOI) to the foreign vendors with the objective of seeking a submarine with the capability of firing land-attack missiles and anti-ship cruise missiles.[30] Likewise, a similar EOI was also issued to four domestic companies: MDL, L&T, Pipavav and a consortium of HSL-Adani Defence.[31]

Later that year, in June 2019, Daewoo Shipping & Marine Engineering (formerly DSME, today Hanwha Ocean) was allowed to partake in the competition as a late entrant; at the time, the EOI had already expired.[32] Navantia, too, responded late to EOI in July 2019; despite the firm's belated response, the move indicated its reinterest in the project.[33][34]

However, in September 2019, Saab announced that it would withdraw from the competition, stating that the SP policy placed more control over the construction of the submarines to the Indian partner than to the OEM; the firm argued that both responsibility and liability of the deal should lie with the OEM.[32] Saab's withdrawal left the remaining five firms as the only contestants in the program; all five would be shortlisted by the MoD as strategic foreign partners in 2020.[31]

Shortlisting

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In January 2020, the DAC shortlisted two Indian shipyards and five foreign firms as the finalists in the project: MDL and L&T were chosen as the Indian finalists, while DSME, Naval Group, Navantia, TKMS and Rubin were chosen as the five foreign finalists.[35] A year later, in July 2021, the MoD formally issued an RFP to the finalized contestants for the construction of the six submarines; however, due to the document's stringent conditions, the deadline of the RFP, which was initially scheduled for November 2021, was postponed to June 2022, and later again, to December 2022.[36][37]

Foreign contenders

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The Scorpène-class submarine, which Naval Group had offered.
The Amur-1650, which Rubin had offered.

The five foreign firms shortlisted by the MoD in January 2020, are —

Local shipyards

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The two Indian shipyards shortlisted by the MoD, are —

Post-shortlisting delays

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2021

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The KSS-III, which DSME offered.

In July 2021, MDL issued an RFI to the five foreign contenders with the objective of seeking a partner that possessed a functional AIP system, which had been tested and proved on operational submarine.[51] Unfortunately, three of the five contenders, namely, France, Russia and Spain, did not possess any functional submarine equipped with a sea-proven AIP system, which led to them being disqualified from the competition.[51] The disqualification of the aforementioned three thus left the remaining two contestants, Germany and South Korea, as the only ones with the eligibility to partake in the competition.[52][53] Several observers defended MDL's AIP requirement, pointing out that the IN did not have an indigenously-developed AIP in operational service and that the prospect of conceding to construct the P-75(I) submarines without AIP technology would be a retrogressive step.[54]

In August 2021, TKMS withdrew from the program, citing an incapacity on its part to satisfy several conditions of the RFP, specifically the liability and technology transfer clauses in particular.[55] TKMS complained about a "lack of flexibility" in the tender, arguing that the liability clause - which stipulated that the selected foreign firm would be identified as the sole responsible party for the submarines' construction - was too stringent.[55] TKMS's decision to withdraw from the competition thus left DSME as the sole remaining contestant, which created a "single-vendor situation" - a condition in which only one firm would be able to comply with conditions of a multi-party competition, creating an atmosphere of non-competitiveness.[55][51] The development thenceforth plunged the future of the program into uncertainty, as the MoD would have been compelled to scrap the tender to avoid such a non-competitive climacteric, in accordance with its 2020-issued defence-acquisition guidelines.[55][56]

2022

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In February 2022, Rosoboronexport - Russia's state-controlled intermediary agency responsible for the export of the country's military equipment, announced that it had decided to withdraw from the competition, stating that it lacked the ability to comply with the RFP's requirements.[57] However, the firm proposed a compensatory offer of Kilo-class submarines, which entailed the sale of upgraded Project 636 Kilos and already-decommissioned Project 877 Kilos as interim option to replenish the IN's submarine fleet.[57] Russia's JSC United Shipbuilding Corporation previously made a similar offer to the IN in April 2020, offering to sell three refurbished Kilos.[58]

In April 2022, Naval Group announced that it too would withdraw its participation, stating that it could not comply with the tender's parameters, which called for the supply of a fuel-cell AIP system.[59][60]

Faced with the dual instances of either the foreign contestants being disqualified or withdrawing on their own accord, the MoD resorted to postpone the deadline of the tender thrice - from November 2021 to June 2022, then to December 2022 and again to August 2023.[61][36][62]

Revival

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2023

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The Type 214 submarine, which ThyssenKrupp is offering.
The S-80 Plus submarine, which Navantia is offering.

In February 2023, German and Indian sources reported that Germany had intended to resume its pursuit of the submarine deal, which was then-valued at $5.2 billion, during a two-day visit by German Chancellor Olaf Scholz to India.[63] Notably, Scholz was also accompanied by Martina Merz, the CEO of ThyssenKrupp, who was part of the delegation which accompanied him during the visit.[64] Soon after, The Hindu, an Indian daily-outlet, reported that Germany had planned to present a proposal to India for the sale of six submarine via an inter-governmental route.[65] The report further stated that TKMS, which was in talks with L&T, had decided to partner with MDL.[65]

In June 2023, during a two-day visit by German federal defence minister Boris Pistorius to India, TKMS and MDL signed a Memorandum of Understanding (MoU) to jointly bid for the P-75(I) deal, thus fulfilling the requirements of the SP acquisition policy.[66] Although the financial value of the proposed deal wasn't revealed, the agreement stated that should the TKMS-MDL partnership secure the P-75(I) contract, the partnership would offer the Type 214 submarine - with TKMS being responsible for the engineering and design phases, while MDL being responsible for the construction and delivery of the submarines.[67][68][69]

Concurrently, The Economic Times, another Indian daily-outlet, published a report that same month, stating that L&T Shipbuilding had teamed with Navantia to offer the S-80 Plus submarine.[70] The report also stated that DSME, despite having been a qualified contender, had supposedly chosen to discontinue its participation in the competition, which thus implied TKMS-MDL and Navantia-L&T were the only contending blocs that remained.[70] L&T and Navantia publicly announced their partnership with a teaming agreement in July 2023; under the terms of the agreement, should the Navantia-L&T alliance win the process, Navantia would be responsible designing the submarines, while L&T would be responsible for constructing them.[71]

2024

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Post an initial technical evaluation in February 2024, the IN declared the designs of both the Type 214 and the S-80 Plus to be technically compliant with its desired specifications.[72] In March the same year, IN representatives conducted field evaluation trials (FET) on the Type 214 at TKMS' facilities at Kiel, Germany.[73] Multiple sources later confirmed that the design had met the criteria specified by the tender; notably, reports also indicated that TKMS had offered the Type 212CD submarine, a design until recently deemed to be non-exportable.[73] In addition, the reports also indicated that should the TKMS-MDL partnership be selected, the coalition would deliver the first submarine with 60% indigenous content (IC), a rise from the IN's set conditions of an initial 45% IC.[73][74] Thereafter, the FET for the S-80 Plus design were completed by the IN at Navantia's facility at Cartagena in late-June 2024.[75][73][76]

With the evaluation complete, the FET report is expected to be compiled and sent to the MoD after a period of two months, whereupon the bidding process shall commence.[75] In August 2024, the IN reportedly informed MDL that its offer had passed the project's qualitative trial requirements, which possibly indicated that MDL's offer had a lead over that of L&T, which was also reported by similar sources to having "trial deviations".[77][78]

As of December 2024, the report of the Technical Oversight Committee of the Indian Navy is expected to be submitted by the end of January 2025.[79]

However, another report highlighted that the project could be delayed by over a year as a local competitor has raised "half-dozens of objections" as to wether proper procedures were followed during the trials. As per the report, "complaints ranged from alleged violations of proper procedures to unclear guidance about how to conduct the sea trials". Each complaint would be investigated by a committee before the project can move forward. This could also be an attempt to stall the project for "fear losing out".[80]

See also

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References to the Indian Navy

References

[edit]
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