India’s Submarine Acquisition
Program merits a relook
Amrish
Sahgal
Indian
defense acquisitions are governed by Defence Procurement Procedure
–2002, which lists `free competition' as its basic aim and underlying philosophy. The procedure repeatedly stresses
the importance
of generating maximum competition. It also mandates that competitive
tendering be followed as a norm. Therefore, Indian
defense
acquisitions have to be broad based with tenders being issued to all eligible producers. But surprisingly, under the NDA
regime,
DCN,
the manufacturers of the Scorpene submarine, were the only ones approached
with a request for an offer. Neither Kockums of Sweden (an obvious contender), nor Germany's HDW (then still under a cloud),
were
approached, making the entire `selection' process monopolistic
and
non-competitive. What is more, the finalization pending signing of the contract was done on the basis of selection criteria
that are
hopelessly
outdated. As a result, India almost contracted for a vessel
that lacked many essential facilities like Air Independent Propulsion (AIP), at a price that was not only very high to
begin
with,
but has since been upped enormously by the suppliers on the plea that the costs have gone up due to a delay by the
Indian government
in inking the deal.
The
Indian Navy is understandable very anxious to expedite the process as it sees a major gap in its submarine potential a
few years
down
the line. Haste, however, as we were taught as children, makes for
waste.
It
appears that HDW, which has since been exonerated of all wrong doing by the special court, and given a totally clean chit,
is not
only
keen to offer its Type 214 submarine on transfer of technology basis,
but is also willing to throw in a basket of `offsets' as a sweetener, while bidding at most competitive prices. That
their
prices
are competitively economical was proved recently when HDW won a Portuguese naval contract as the lowest bidder in a
global tender.
What
is even more interesting is that the German HDW boasts of a tried and tested fuel cell technology that provides it with
Air
Independent
propulsion for prolonged periods when submerged. Submarines
with this technology are in service with the German and Greek navies, are being built for the South Korean Navy and
are being
supplied
to the Portuguese Navy.
Of
special interest to India
is the existence at Mazagon Dock of compatible
equipment dating from the period when it constructed HDW Type 209 (Shishumar Class) subs. Indeed, some of this
equipment is
currently
being used to refit these vessels. This equipment, can not only save India millions if the more advanced HDW 214 subs
are to be
assembled
there in the future, but also imply a critical six-month or more
saving in time. Furthermore, expertise already exists at Mazagon Dock in applying HDW technology and manufacturing
processes, whereas,
if
India
goes in for the French Scorpene, not only would substantial fresh capital expenditure need to be incurred, but the
learning curve
would
also be very much longer.
Shekhar
Dutt, Secretary of the Dept. of Defence Production during a recent CII meeting on Offset and Countertrade asserted that
India
must
focus on Offset agreements for all major defense deals The French
have offered no offset deal with the Scorpene, whereas the Germans appear to have made it clear that they are ready
and willing
to
discuss substantial and attractive offset terms with India. This
would
not only upgrade Indian technological expertise, and capabilities,
but also, over the years, generate substantial export revenues, thereby even further reducing the effective price
of the
submarines.
The
Germans feel that the Indian Navy's fears can be well addressed by them and are confident of their ability to deliver the
Type 214
vessels
in a shorter time frame than what the French could. They base their
confidence upon their ongoing production program at the HDW yard and the skills and infrastructure available at Mazagon
Dock.
All
in all, it would appear that a relook into the purchase of this vital defence equipment, which shall have a bearing upon
this nation's
security for many decades to come, is in order.
Amrish
Sahgal is a defense and strategy analyst
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