India: Government Approves Joint Venture Between Mazagon Docks and Pipavav Shipyard
The Indian government has approved a joint venture (JV) between defense public sector Mazagon Docks and private sector Pipavav shipyard just after the cabinet adopted the defense ministry guidelines for its public sector units to establish joint ventures with private firms, reports the Daily News Post.
“Now that the guidelines for the public-private defense joint ventures have been formulated, we have given the go-ahead for the MDL-Pipavav JV, provided it conforms to the cabinet-approved guidelines,” a top defense ministry official told IANS. He added that the JV will be signed in about a month. Cooperation between MDL and Pipavav is expected to help the defence shipyard to go in for modular ship construction technology.
India made defense production available to the private sector in 2000. Ever since, at least half-a-dozen private shipyards have shown interest in warship building projects. India has already placed orders for 49 warships with shipyards, out of which 40 are being built in Indian shipyards.
Two years ago, India allowed private shipyards to bid for shipbuilding contracts on a par with Defence Public Sector Undertaking (DPSU). However, private shipyards such as Larsen and Toubro, ABG and Bharati questioned the MDL-Pipavav JV formation, announced last year, and protested to the defense ministry against the move, thus the government postponed the JV until the policy on such ventures was adopted.
MDL is one of the four defense shipyards of the country, apart from the Goa Shipyard, Kolkata-based Garden Reach Shipbuilders and Engineers, and Visakhapatnam-based Hindustan Shipyard. The key warship builder of the nation has orders for building Shivalik-class stealth frigates and six Scorpene diesel-electric submarines.
Established in 1997, Pipavav was constructing commercial ships and now is a new entrant in warship building with a massive facility in Gujarat.
Shipbuilding Tribune Staff, March 5, 2012