15 minute read
Breathing Life into the stillborn strategic Partnership Model
INS Kalvari Class
There are strong possibilities for the SP model on submarines to take off, the roadblocks notwithstanding. What is needed is a risk-taking attitude, focus on developing indigenous capability with collaborative support
Advertisement
By AJIt k. thAkur
C
hina is a bully, and like all bullies, the communist dictatorship only understands the language of force. In 2017, when the Indian and Chinese militaries were engaged in a Mexican standoff in Doklam, China’s state councillor Yang Jiechi and India’s National Security Advisor Ajit Doval met to discuss the presence of Indian troops at Doklam. Yang asked: “Is it your territory?” Doval replied that the territory belonged to Bhutan, and said: “Does every disputed territory become China’s by default?” The Chinese got the message and backed off. Despite finding itself in a strategic sweet spot amid the ongoing global order churn, India hasn’t been really able to capitalise on the economic, strategic and military opportunities that have opened up.
The sweet spot window is a small one that emerged as a result of west’s bigger game of wreaking Russia and to wean away India from Russian influence. For the west, it is an important milestone. Till the time India buys from Russia, the power game of the west is incomplete and sanctions won’t work. Moreover, the ongoing Ukraine war has forced western countries to increase their defence budget. The opening of their defence market which till now was either closed or had very low business value has led to the reduction of interest in India.
And, India can’t just blow this historic, sort of unimaginable and once-in-a-generation opening to realise its aspiration of being a responsible global power.
The continuous chanting of Atmanirbhar Bharat and Make in India and push by the government to achieve Atmanirbharta in Defence hasn’t yielded the result as perceived. Why is it still an underperforming initiative? Why there is no solution to country’s defence technology, affordability and quality woes?
Everyone is clueless, be it Armed Forces, defence industry or the government and as a result, the strategic autonomy in defence to leverage India’s rise as global power remains elusive. The main issue is with uncertainty of order flow as numbers don’t justify investment by private companies and DPSUs alike.
In the global power play, a nation’s heft is determined by varied factors like its robust maritime capabilities, technology leadership, economic prowess and military power. India has to cover a lot of ground to justify its stake in the power play. It’s the best time for India to step up its efforts and take advantage of the current geopolitical situation to fix up its indigenous defence capabilities.
Indian Fuel Cell Based Air Independent Propulsion (AIP) System
“When the boat comes up for retrofitting in 2025, it will be fitted with the indigenous aip which has been made in india by DrDo and indian industry. Work is going on to develop a module which has to be fitted on the submarine when it comes. there are industry partners including larsen & toubro and thermax, and the naval Materials research laboratory (nMrl) of DrDo which has developed this.”
Dr G satheesh reddy, secretary, Department of Defence r&D and Chairman DrDo said recently in a conversation with Financial express online
Naval thrust
So, to give a head start—India can begin by paying special attention to the Indian Navy’s requirement indian navy ThaT has sPeaRheaded The indiGenisaTiOn eFFORT WiTh sUCCess is sTaRinG aT iTs OWn vULneRaBiLiTy, UnPRePaRed TO FaCe The MULTiPLe ChaLLenGes ahead
in order to strengthen its maritime capabilities and close in the widening gap with its northern neighbour—China—which has emerged as a formidable naval power.
In today’s world where it is difficult to hide ships and land and air assets, submarines continue to remain undetected and are formidable platforms with their lethality as they carry the complex weapon suite. While India doesn’t have a direct maritime threat from China (which would be land and air), credible submarine fleet allows it the sea denial capability to disrupt China maritime ambitions, in IOR.
It’s an irony that the Indian Navy which has spearheaded the indigenisation effort with success is staring at its own vulnerability, unprepared to face the multiple challenges ahead.
Its 30-year plan to induct 24 submarines by 2030 is well behind schedule and the new initiative— the Strategic Partnership (SP) model, taking note of the recent development, in all probability may end up as a stillborn. Nothing
South Korea inaugurates new 3000 ton submarine
unusual about it as many such initiatives have been blown out without a start in the past.
As Project 75 is nearing completion with the last of submarines scheduled to be commissioned next year, the follow-up Project 75 (I) under the strategic partnership (SP) model to build anothersix submarines is facing headwinds now for myriad reasons.
The SP model, first proposed by Dhirendra Singh committee in 2013 was introduced six years ago in 2016. It involved one nominated Indian private company and foreign OEMs (shortlisted by MoD). The idea was very simple, build capabilities in private sector and make them stand at par with DPSUs. It intended to ‘institutionalise a transparent, objective and functional mechanism to encourage broader participation of the private sector, in addition to capacities of DPSUs/OFB, in manufacturing of major defence platforms. It included submarines, fighter aircraft, helicopters, and armoured fighting vehicles.
The submarine programme – Project 75(I) is the first to be progressed under the SP concept and its progress so far has been disappointing to say the least.
Right from the start, the concept of strategic partnership was a flawed one as it lacked transparency and clarity on functional mechanism. Moreover, my observation from the sidelines has been that it was bugged with hidden deep state agendas which have been continuously at play without getting traced or identified since independence. Had not this been the case, India would have been close enough in
While working on the article, the writer interacted with Navantia’s India Director Fernando Formoso and posed three questions to him. His response was straight forward. Excerpts:
The 75I project is witnessing exodus of strategic tech partners… latest being naval Group. According to media reports, navantia too is not keen. Is it true?
Navantia is willing to support Indian Navy to achieve strategic goals of self-reliance in the military shipbuilding, providing a state-of-the-art engineering after our own success with the Spanish Navy’s S80 class submarine.
As per our knowledge, there have not been any official announcements regarding SPs selecting OEMs as partners for the offer, therefore offers have not been prepared, delivered, or even withdrawn by any of the competing OEMs. It is true that there are some challenging requirements that seem difficult to meet by the OEMs.
In any case, we are working hard to get a fully compliant solution with the current constraints of the RfP, therefore Navantia would like to highlight its commitment to the Indian Navy processes, specifically for this project, where we have been
achieving its self-reliance goal and technological autonomy.
ProJeCt 75(i)
Stalled now with uncertain future, the Project 75(I) programme cannot be abandoned or delayed further. It will be a strategic disaster. Anchored in the Indian Ocean region, India’s role as a strong maritime power and its potential to exploit China’s strategic vulnerabilities assumes significance in context of the larger global power game.
The Indian Navy managed the selection process of shortlisting the foreign and Indian companies smoothly, despite the process being cumbersome and contentious. The only surprise being the further dilution of the SP model, as the short-listing of the state-owned Mazagon Dock Shipbuilders Ltd (MDL) alongside the private sector conglomerate Larsen & Toubro (L&T) was against the spirit of the new concept.
The foreign companies shortlisted for Project 75 (I) were Naval Group (France), ThyssenKrupp Marine Systems (Germany), Rosoboronexport (Russia), Daewoo (South Korea), and Navantia (Spain).
Subsequently, last year in July, the Request for Proposal (RfP) for six submarines was issued to the two Indian shipyards, specifying that they could tie up with any one of the shortlisted foreign companies for the project. The bids that were to be submitted by December 2021, apparently got extended to June 2022 as it brought to the forefront the inherent flaws and discomfort of the foreign companies.
Fernando Formoso Freire, Director India, Business Development & Commercial Division, navantia (sEPI Group)
working hard since the first day to provide the IN with a solution.
Timing and contractual requirements have been very exigent, and of course, we would be more confident if some requirements where relaxed. Nonetheless, we still believe that we have a very good product and highly experienced engineering skills to develop the best solution to the Indian Navy.
In short, we are still there, and we will keep on working to develop our proposal with the key providers to get the Indian Navy the best solution to the P75I project.
Considering the situation where 75I project undergoes amendments to remove the irritants issues, will navantia be interested to be a strategic partner?
Of course, as I just mentioned, Navantia is still working under the current requirements, aiming a full compliant solution where the stakeholders will be achieving a positive outcome of the process, always under the Indian Government self-reliance strategy.
Navantia has supported other navies and foreign governments to develop their industries. The P75I is not going to be different at all. If some of the tough issues could be removed, it would make the path easier, and more profitable for all the stakeholders, as everyone can focus on getting the final user the required capabilities through a powerful design.
Navantia will be always adaptive to the rules of the program. Even though if nothing changes, our determination to support this project will remain the same. As a governmentowned company, we will pursue the best outcome on the program results, supporting the good relationship between India and Spain, doing what we do the best, which is military shipbuilding.
In a scenario, though hypothetical now, L&T and MDL join hand through a sPV with government approval to work on the submarine project. Would navantia associate with it as technical consultant?
If L&T and MDL would get to join efforts for this project, Navantia would still be eager to contribute to this SPV, providing our best endeavours to deliver the P75I project. We are open to work with either of the Strategic Partners (SP), and we feel very confident in working with both, as we have proved it in the past with both companies.
Again, Navantia is adaptive to the required typology of contract structure, and would be thrilled to join efforts with two reference entities in the naval shipbuilding activity as MDL and L&T. We believe we can provide state of the art engineering and best practices to support both corporations, and if an SPV is the path that will be required for us to walk, we would definitively bring our best practises to make this program get to the end successfully.
Both MDL and L&T have great shipbuilding capabilities and through a long-term relationship, we are confident that the program will achieve its objectives. Submarines are the most complex naval units of the maritime forces and would definitively need the outmost efforts of the most skilled companies to get to the best product, so we would be happy if we could get involved in this SPV.
AIMINg TOO hIgh?
Talking of flaws, the unrealistic and ambitious specifications of the Services Qualitative Requirements (SQRs) that included unproven AIP technology and certain RfP conditions made the foreign companies uncomfortable. Eventually, it led to some misrepresentation of facts and some error on MoD’s part in shortlisting the foreign companies.
Later on, according to some unconfirmed reports, it emerged that ThyssenKrupp got uncomfortable with the requirement of indigenous content in the submarines and the extent of liability of the foreign partner. Similarly, Navantia has issues with the RfP and Daewoo wants some changes in the RfP conditions.
And with the recent announcement made by the Naval Group to pull out of the Project 75(I), it looks like the submarine project is headed towards a dead end. The Naval Group cited certain conditions in the RfP behind their inability to submit the bid submission. All these issues bring out the fact that the concerns of the OEMs during the discussions phase were not taken seriously. Biggest stumbling points are few – indigenous AIP, size and liability.
Hence, would it be prudent to make the changes in RfP? Nope, would be the unanimous response as making changes in RfP are procedurally cumbersome, time consuming and prone to delays. And defence dealing with Russia (ROE) in the present context, puts India in a tight spot as it cannot ignore threat of sanctions by US and its allies. In my opinion the RfP and the program can be salvaged. Also, another factor which is critical is that Indian companies don’t have the capability to make in India the entire submarine. Thus the program’s indigenisation component (IC) has to be a step up function aiming to achieve credible IC in the last submarine of the project.
Suggesting a more practical way to resolve the issue, former financial advisor to the Ministry of Defence, Amit Cowshish in his recent article opined, “Amend the RfP by deleting the requirement for AIP altogether, make other changes that’s acceptable to all concerned, provide another chance to the Indian companies to negotiate tie-ups with the shortlisted foreign companies and bid for the project. However, the RfP should stipulate that the foreign company will be required to extend all support to the selected Indian company at a later stage in upgrading the submarines with DRDO’s AIP.”
Cowshish further adds that moving forward, MoD should also consider de-complicating the projects that entail manufacturing of foreign-origin equipment, weapon system or platform in India referring to the Airbus-Tata’s Buy and Make contract that was awarded by MoD for 56 C-295MW transport aircraft to replace the ageing fleet of Avro aircraft.
The chronic policy flip-flops and delayed decision-making have brought the submarine force-levels of Indian Navy to an abysmal low along with rapid obsolescence. And the hope Project 75(I) worth Rs 43,000 crore brought for the Indian Navy and ship building industry
Indian Scorpène Submarine
C-295 aircraft
in its wake is in a state of limbo.
A timely execution of the project would have ensured the seamless follow-on to the Scorpene project, serial-production and indigenisation of the vital weaponplatform and would have given a lifeline to Mazagon Docks (MDL) to continue with its state-of-theart submarine-building facility, without losing expertise and highly-skilled workers.
Highlighting the added complication that has arisen with the development of indigenous AIP system by DRDO, former Navy chief Admiral Arun Prakash wrote in his article, “Based on electrolytic fuel cells, this system produces energy by combining hydrogen and oxygen with only water as the waste product. It has no moving parts and is safer and more efficient than others.
The drawback, however, is that the 8-10 metre-long AIP module has to be installed on a submarine and subjected to stringent underwater trials before the Indian Navy can accept it as “operationally proven” for induction into service. Since installation and trials of this module will be a complex and time-consuming process, three major issues are likely to arise: (a) who will provide a submarine for trials? (b) who will undertake installation and conduct trials? and most crucially, (c) who in our system will take such crucial decisions in a timely manner?
According to Admiral Arun Prakash, there should be no further delay and it’s important enough to attract the time and attention of our highest decisionmakers. He suggests that a practical way forward may be for one of the strategic partners and DRDO to jointly seek a foreign collaborator for P-75(I) who will install the indigenous AIP on the selected submarine and conduct collaborative trials. Once proven at sea, the indigenous AIP could be installed in all new subs and retrofitted in the old ones.
This is to say that infusing life to the stillborn submarine Project 75(I) under the Strategic Partnership model is very much feasible.
The Indian defence establishment and decision makers should re-evaluate the process with urgency. They should set up a new entity as a special purpose vehicle (SPV) with Larsen and Toubro (L&T) and Mazagon Docks (MDL). The executive management could be with Larsen and Toubro. Larsen and Toubro’s management of the SPV will hopefully ensure timely delivery given their track record.
The SPV can rope in any one or two foreign companies as technology consultants. MDL with its skill-set and experience in building Scorpene submarines, Indian Navy’s design support and end-user insights and DRDO as technology provider may provide the much-needed thrust to steer the project ahead.
Most importantly, the MoD’s focus should be on bigger issues and to resolve them. The dockyard and Navy can manage the technical aspects very well and the decisions to be taken at MoD level are – RfP changes, DRDO AIP. Every design will have some positive and some negative. The need is to finalise one and move ahead with the tactics to be built around that technology.
India should also learn lessons from other countries (South Korea and Australia) who have taken this path and succeeded. Examining their model and how they went about, would provide the right clue to pick from where they left and help India avoid the complex and cumbersome reinventing the wheel process, altogether.
Technology transfer in real terms never happens as some critical components of technology are always out of bound. And, even if it comes, the price to be paid is exorbitant and India’s experience has been bad on this front. It’s time to discard the risk-averse attitude and indulge in indigenous technology development with collaborative support of technology partner. To make it happen, some tough decision needs to be taken. Is India prepared for it? a PRaCTiCaL Way FORWaRd May Be FOR One OF The sTRaTeGiC PaRTneRs and dRdO TO jOinTLy seek a FOReiGn COLLaBORaTOR FOR P-75(i) WhO WiLL insTaLL The indiGenOUs aiP On The seLeCTed sUBMaRine and COndUCT COLLaBORaTive TRiaLs
