Engineering conglomerate Larsen & Toubro (L&T) has written to the NITI Aayog raising concerns over the recent submarine project award to public sector owned Mazagon Dock Shipbuilders on a nomination basis, according to people with direct knowledge of the development.
“The company has written to NITI Aayog with two concerns- one, there should be a level playing field and second, public sector shipyards are already over-burdened and facing delivery delays,” said a source on the condition of anonymity. He added, the company has pointed out such awards are not in national interest as project delivery may be delayed.
Concerned officials at L&T declined to comment on the story.
In April, media reports suggested, Mazagon Dock will be awarded the $8-billion ‘Project-75 India’ programme that involves building six advanced submarines. The project, industry officials add, was earlier scheduled to be awarded under the Strategic Partnership (SP) policy.
Under the SP policy, the government was to select one private sector company each as a strategic partner, which in turn was expected to invest and develop a long term eco-system to deliver certain projects. Under the policy, fighter aircraft, helicopters, submarines and armoured fighting vehicles were identified for the award. “Not much action has been seen on the policy so far,” said an industry official.
L&T, according to the person quoted earlier in the story, chose to write to NITI Aayog with reference to the Make In India programme which looks to promote private investments across sectors including naval defence.
The past one decade saw L&T invest and develop its defence shipyard at Kattupalli in Tamil Nadu. The shipyard has been ready for operations since 2012, but continues to be a drag on L&T’s financials due to lack of big defence orders.