On January 31, India’s Defence Acquisition Council (DAC) chaired by Defence Minister Rajnath Singh set the stage for the Project 75(I) competition by approving shortlists of contenders for the estimated $6.3 billion tender to build six AIP-fitted, missile firing diesel-electric submarines for the Indian Navy under the Strategic Partnership Model.

“The DAC approved shortlisting of Indian Strategic Partners (SP) and the potential Original Equipment Manufacturers (OEMs) that would collaborate with SPs to construct six conventional submarines in India,” the Ministry of Defence announced in a statement.

This is a landmark project aimed at building up indigenous submarine design capability for future programmes.

Indian hopefuls which have made the cut are the Ministry of Defence-owned Mazagon Dock Limited (MDL) and the private sector Larsen & Toubro. This is the first time that an Indian private sector shipyard will get an opportunity to compete in a major tender.

All five foreign OEMs which had responded to the Indian Navy’s Expression of Interest (EoI) have made it to a parallel shortlist. These are Navantia of Spain ThyssenKrupp Marine Systems of Germany, Rosoboronexport/Rubin of Russia, Naval Group of France and Daewoo Shipbuilding & Marine Engineering of South Korea. SP’s Naval Forces had earlier exclusively reported that Saab of Sweden had pulled out of the competition.

The Indian hopefuls would be required to negotiate with the shortlisted OEMs to throw up the best offer for an eventual two-way competition. The submarine design would be owned by the Government of India through a separate contract with the OEM involved in the winning bid.

India is not seeking a submarine off-the-shelf, but the competition would be shaped by the existing or under development submarines of the shortlisted OEMs. The final product delivered to India would be a derivative of one of the five submarines which represent what the contenders have on offer. These are Navantia’s S-80, ThyssenKrupp’s Type 214, Rubin’s Amur, Naval Group’s Scorpene and Daewoo’s KSS-3.

While the final quality requirements will be reflected in the RFP, the Indian Navy has indicated the broad contours of the capabilities it seeks. This includes a fuel cell-based AIP and tube-launched land attack missile on a submarine with a dive displacement of over 2,000 tonnes.

Here’s how the five options measure up at the starting point of competition:

ThyssenKrupp’s Type 214

The Type 214 is the only contender with a proven fuel cell AIP. Both the Type 214 and its predecessor are capable of firing American-supplied Harpoon UGM-84 missiles from torpedo tubes.

ThyssenKrupp has the advantage of a long-standing relationship with India, the experience of transferring technology for building two Type 209 Shishumar class submarines at Mazagon Dock in Mumbai, and maintaining and upgrading four submarines for the Indian Navy.

And unlike the rival Scorpene of the French Naval Group, which is made only for export since the French Navy operates only nuclear-powered submarines, the Type 209 and 214 are operarted by the German Navy, giving the German shipbuilding complex more intimate stakes in the submarines its develops.

A proven submarine and a proven fuel cell AIP work to its advantage. But this offer is not backed by the geopolitical heft of the type which beef up Russian and French bids in India.

Naval Group’s Scorpene+

The Naval Group’s Mesma AIP technology is not fuel cell based. The Scalp missile brings with it a 1,000-km range land attack capability.

The French offer has the advantage of a running Scorpene construction facility at MDL and around it an established Industrial eco system which could save Industrial costs and enable a low price bid.

The significant leverage which France exercises over India as a time-tested strategic partner will also make the offer Scorpene Plus.

The terms of the programme require transfer of ownership of submarine design to the Government of India, which seeks deep transfer of technology to give it selfreliance in submarine design and development in the future

Rubin’s Amur

The Amur submarine is still work in progress, and it doesn’t have a proven AIP. Known as the Lada in Russia, the first boat faced development challenges and did not appear to have met the requirements of the Russian Navy. The second ‘Lada’, launched in 2016, is intended to be the first operational submarine in its class with the Russian Navy.

The Amur submarine is still work in progress, and it doesn’t have a proven AIP. Known as the Lada in Russia, the first boat faced development challenges and did not appear to have met the requirements of the Russian Navy. The second ‘Lada’, launched in 2016, is intended to be the first operational submarine in its class with the Russian Navy.

Daewoo’s KSS-3

The surprise package of this competition is the South Korean emergence. Building blocks firmly in place after building the Type 209 and Type 214 with deep transfer of technology from Thyssenkrupp, Daewoo has proven submarine capability which is reflected in the Indonesian order for the Type 209. It has now clearly emerged as a rival to its German mentor for export orders and is developing on its own the more capable, 3000-ton KSS-3.

Daewoo is also taking a step beyond the proven German AIP technology. It is developing a much improved lithium iron battery-based fuel cell AIP as against the traditional lead acid battery AIP. The Germans are following suit.

While Korean Type 209’s are reportedly armed with Harpoon missiles, there’s no clarity on what it could offer for Project 75(I). Also, as a new entrant into the India’s arms bazaar labyrinth, Daewoo does not have the decade-long exposure to the Project 75(I) environment.

Navantia’s S-80

The first of the four S-80s ordered for the Spanish Armada should have been in the water in 2014-15 but it still hasn’t hit that milestone due to design and buoyancy issues. An American consultant finally helped Navantia to resolve the buoyancy problem posed by about 300 tonnes of excess weight by redesigning the submarine to extend its length.

Also, Navantia doesn’t have a proven AIP yet. The first two S-80 boats will come without an AIP. The third and fourth boats will be fitted with an AIP, but the performance will be known not before 2024.

Also, no clarity on which land attack missile could be offered with the S-80 but it may be the Harpoon.

While it did tie up with L&T to bid for the Indian Navy LPD tender in the past, Navantia lacks the background and experience of the Russians, French and Germans in negotiating defence contracts in India.

ToT RIDDLE & THE LONG ROAD AHEAD

The terms of the programme require transfer of ownership of submarine design to the Government of India, which seeks deep transfer of technology to give it self-reliance in submarine design and development in the future.

This would necessitate a stand-alone contract between the Government of India and the OEM for transfer of design ownernship, besides the one between the Government and the SP entity for the purchase of submarines and another between the SP and the OEM for submarine construction and transfer of technology. Observers closely associated with discussions on Project 75(I) reckon the design alone could be worth billions, which could possibly push the aggregate cost to $9-10 billion.

There is also abundant skepticism about the SP Industrial Model to deliver the submarines. “Potentially, each of the five shortlisted OEMs two separate bids for partnership with MDL and L&T. This is a huge and very complex exercise, given that the two shipyards have different capabilities. This could take years,” cautions one seasoned inside. He reckons that due to the demands of the process, it will take at least a decade from now to deliver the first boat.

Another concern is over compliance on transfer of technology (ToT). “This has to be an evolutionary process. You can’t put a cut-off date to it. Also, there need to be clear yardsticks for measuring ToT. There needs to be a model which will provide for reasonable audit and control. The Navy will have to be on board the entire Industrial process,” reckons an Industry veteran.

But the “biggest hazard” of this procurement model is the L1 approach which contenders will be forced to adopt in order to win, since all technical bids are expected to be compliant. “Deep transfer of technology and the L1 approach can’t go together,” he warned.