December 2009 I Commentary on Naval Construction Projects

A look at the Naval Augmenting Capability

construction projects –
current and planned With India's increasing global clout, the Indian Navy is poised for a much larger role.

The Indian Navy is augmenting capability to emerge as a truly blue-water Navy with
strategic reach to operate from Africa's eastern coast right up to the Malacca Straits. It
is working towards becoming a networked-force with capabilities to manage and
control the entire Indian Ocean Region (IOR).

While some acquisitions of the Indian Navy have been beset with delays and
protracted procurement procedures, the strategic blueprint and planned expansion of
capability gives reassurance of efforts to meet the desired objectives

This commentary provides a quick round-up of some of the major programmes

underway.

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 Project 1143
Aircraft Carrier ADMIRAL GORSHKOV a.k.a.
INS VIKRAMADITYA
Currently undergoing refit and
modernization at SEVERNOYE shipyard
–Russia
Original Delivery- End 2008 or Early
2009.
Original Price: USD 974 Million
Final agreed price : USD 2,500 Million
Carrier Base: KARWAR , Karnataka
New delivery schedule is 2013.
After intense negotiations and a cost over-run
of 200%, the final price has been agreed at
USD 2,500 million.
In addition a deal worth USD 740 million was
signed for 16 MIG 29K fighters; these are
already under delivery.
The worry now for the country is that INS
VIRAAT is virtually operating on its last legs. It
has undergone a major refit, lasting one year,
enabling a life extension beyond 2009.
However, it is still running short of Harrier
Jump Jets, with less than 10 still being
operational. If India is to maintain its blue
water projection, INS VIKRAMADITYA’s ETA can
no longer be delayed.
Project 15A & 15B
Guided Missile Destroyer
Currently being built at MAZAGAON
DOCKS (MDL), India
Plan to build 3 vessels.
INS KOLKATA to be delivered in MAY
2010, followed by INS KOCHI in MAY
2011 and the third (un-named) vessel
in MAY 2012.
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Price: Each vessel estimated to cost
approx. USD 622 Million.
The first vessel will join the fleet only in 2012.
The subsequent vessels will join after a gap of
1 year each. This project was preceded by the
Delhi class of vessels. The navy has kept the
option of 4 more vessels under this project,
taking the total tally to 7. This is termed as
Project 15B and the vessel’s under this
programe will have stealth capabilities and the
first to be armed with the BrahMos-2.
Project 17A
Stealth Frigates
Planned to be built at MAZAGAON
DOCKS (MDL) and GARDEN REACH
Shipbuilders and Engineers (GRSE)
Kolkata.
Delivery- Construction is slated to
begin by end 2011 and the first
delivery is anticipated in 2015-2016.
In total there will be 7 vessels, with the
last one to be delivered by 2021.
Budget- The Navy insists that the cost
of each vessel be maintained in parity
with the cost of the Shivalik class
frigates being currently inducted. The
cost of each being approx. USD 578
Million. The final price will only be
known once the RFP is responded to.
In 2009, the DAC ascertained that the total
project cost will be USD 9,780 Million, or USD
1,127 Million for each frigate.
These will be the first vessels to be built by the
modular construction method. This method is
also being used in the manufacture of the
Indigenous Aircraft Carrier. Since the 2
shortlisted shipyards did not have any prior
experience in this form of construction, the
Navy had insisted that the first 2 frigates be
 built abroad, which was not accepted by the
DAC.
Project 11356
Russian Krivak IV Class Frigates
Currently being built at Yantar
Shipyard, Kaliningrad, Russia.
Delivery planned for 2012.
Budget- USD 1,600 Million reported for
the contract signed in July, 2006.
Progress is reported to be satisfactory despite
Russia’s past track record not having been very
encouraging with the 3 Krivak class frigates
built in 2004 all delivered post the delivery
date.
Project 71
Air Defence Ship - ADS
Currently under construction at Cochin
Shipyard (CSL), India.
Delivery now planned for 2013 against
originally planned for 2010
Budget- Anticipated to be close to USD
1,700 million against USD 450 Million
when planned.
This is the first of the 2 planned Aircraft
Carriers to be completely indigenous.
The carrier was initially delayed due to Russia’s
inability to supply the steel required for the
building. Subsequently design changes
including those impacting the length of the
carrier caused further delays.
It is now generally accepted that the delivery
will take place only in 2015
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Project 28
Anti Submarine Warfare Corvette (ASW)
Currently 2 are being built at GARDEN
REACH Shipbuilders and Engineers
(GRSE) Kolkata.
Delivery originally planned for 2012
now scheduled for 2014
Budget originally estimated at USD 622
Million, now revised to
USD 1,555 Million.
These 4 Corvettes were planned to encourage
the participation of the Indian industry in naval
ship building programmes. However, this has
led to a delay of almost 24 months, with the
first delivery now scheduled only in 2014, and
the project cost has revved up to a staggering
USD 1,555 Million.
Project 75
Scorpene Submarine
Currently being built at MAZAGAON
DOCKS (MDL), India.
Delivery originally planned for 2012,
now slated for 2015
Budget at USD 3,500 Million.
A total of 6 submarines are to be built in this
programe.
These vessels are similar to the ones being
delivered to the Chilean’s and the Malysian’s,
however they are being built in India. The
scorpene programme has been plagued by
accusations of impropriety since the beginning.
The latest news concerns crucial parts which
were to be bought from Aramis (original
vendor), then priced at roughly USD 444
Million; now being quoted at USD 1,044
Million. Since these parts are crucial to the
performance of the submarine, there was no
 competitive bidding and consequently the
prices of these components were not frozen
earlier. This has led the programe coming to a
halt, with the first SCORPENE now only slated
to be delivered by 2015.
Advance Technology Vessel (ATV) - INS
ARIHANT
Currently undergoing final fitment at
Vishakapatnam, India.
Delivery planned for 2011
Budget unknown
Arihant was positioned as India’s response in
the field of a Miniature Heavy Water Nuclear
Reactor.
The first vessel of this programe was a
Technology Demonstrator, However at its
ceremonial launch on 26th July, 2009, the
Nuclear Reactor and other associated systems
were not onboard.
The vessel is slated to join the Navy only 2011,
after almost 2 years of trials.
This programe has a total of 5 nuclear
submarines under it. The design of these
submarines is similar to the RUSSIAN CHARLIE-
II class. Incidentally India had leased one such
submarine in 1988 and re-christened it INS
CHAKRA.
Project 971
Shchuka-B - K-152 Nerpa a.k.a. INS Chakra
Already inducted into the Russian
Navy, to be transferred to Indian Navy
in early 2010
Budget- USD 650 Million
India had signed a contract with Russia for a 10
year lease for this submarine and had paid for
its completion.
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During a sea-trial in Novemeber 2008 in the
Sea of Japan, A fire extinguishing system went
off by mistake, killing 20 people onboard.
However, in spite of these difficulties, the
Russian Navy inducted the NERPA in December
2009, and will eventually lease out to India by
the first half of 2010.
Mine Counter Measure Vessel (MCMV)
Project under technical evaluation of
bids submitted by Intermarine, Italy
and Kangnam Shipyards, South Korea
2 MCMVs to be bought, rest to be built
at GSL.
These MCMVs are replacements for
the Pondicherry class of MCMVs to be
phased out.
Delivery originally planned for 2008,
now anticipated in 2011.
Original Budget: USD 1,000 Million
This programme includes a total of 8 vessels,
with 2 being bought off the shelf and the
remaining 6 being built in India at GSL. The
programme was initially proposed in May
2004.
India was supposed to retire its ageing fleet of
Pondicherry class of MCMV’s that have been in
service since 1970-80.
Both Intermarine, Italy and Kangnam
Shipyards, South Korea are going through the
technical evaluation process currently which is
anticipated to complete by early to mid 2010.
Fleet Replenishment Tanker
2 tankers ordered on Fincantieri, Italy.
First tanker currently being built at
Liguria, Italy.
Delivery of the first tanker planned for
2010.
Original Budget- USD 54 Million
 2 Tankers are to be built under this
programme. Religare Capital Markets Limited
www.religare.in
The tankers would be 175m long and be
capable of refueling 4 ships simultaneously. D3, District Centre, SAKET
New Delhi 110017, INDIA
The maximum service speed would be
20knots. As of now, the construction programe Telephone:
is well on course. +91 (11) 3912 5000

FAX:
In 2008 and 2009, there were issues wrt the +91 (11) 3912 5051,
offset obligation fulfillment for the contract, +91 (11) 3912 5052
which now seem to have been resolved. Col. K. V. Kuber (Retd.)
Sr. Vice President
Investment Banking
Col.kuber@religare.in

Rahul Gangal
Sr. Vice President
Strategic Advisory Services
Rahul.gangal@religare.in

Ankur Gupta
Senior Manager
Defence Advisory Services
Ankur.gupta1@religare.in

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