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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 Price: Each vessel estimated to cost
approx. USD 622 Million.
Aircraft Carrier ADMIRAL GORSHKOV a.k.a.
INS VIKRAMADITYA The first vessel will join the fleet only in 2012.
The subsequent vessels will join after a gap of
Currently undergoing refit and 1 year each. This project was preceded by the
modernization at SEVERNOYE shipyard Delhi class of vessels. The navy has kept the
–Russia option of 4 more vessels under this project,
Original Delivery- End 2008 or Early taking the total tally to 7. This is termed as
2009. Project 15B and the vessel’s under this
Original Price: USD 974 Million programe will have stealth capabilities and the
Final agreed price : USD 2,500 Million first to be armed with the BrahMos-2.
Carrier Base: KARWAR , Karnataka
New delivery schedule is 2013. Project 17A

After intense negotiations and a cost over-run Stealth Frigates


of 200%, the final price has been agreed at
Planned to be built at MAZAGAON
USD 2,500 million.
DOCKS (MDL) and GARDEN REACH
In addition a deal worth USD 740 million was Shipbuilders and Engineers (GRSE)
signed for 16 MIG 29K fighters; these are Kolkata.
already under delivery. Delivery- Construction is slated to
begin by end 2011 and the first
The worry now for the country is that INS delivery is anticipated in 2015-2016.
VIRAAT is virtually operating on its last legs. It
In total there will be 7 vessels, with the
has undergone a major refit, lasting one year,
last one to be delivered by 2021.
enabling a life extension beyond 2009.
Budget- The Navy insists that the cost
However, it is still running short of Harrier
of each vessel be maintained in parity
Jump Jets, with less than 10 still being
with the cost of the Shivalik class
operational. If India is to maintain its blue
frigates being currently inducted. The
water projection, INS VIKRAMADITYA’s ETA can
cost of each being approx. USD 578
no longer be delayed.
Million. The final price will only be
Project 15A & 15B known once the RFP is responded to.

Guided Missile Destroyer In 2009, the DAC ascertained that the total
project cost will be USD 9,780 Million, or USD
Currently being built at MAZAGAON 1,127 Million for each frigate.
DOCKS (MDL), India
These will be the first vessels to be built by the
Plan to build 3 vessels.
modular construction method. This method is
INS KOLKATA to be delivered in MAY
also being used in the manufacture of the
2010, followed by INS KOCHI in MAY
Indigenous Aircraft Carrier. Since the 2
2011 and the third (un-named) vessel
shortlisted shipyards did not have any prior
in MAY 2012.
experience in this form of construction, the
Navy had insisted that the first 2 frigates be

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built abroad, which was not accepted by the Project 28
DAC.
Anti Submarine Warfare Corvette (ASW)
Project 11356
Currently 2 are being built at GARDEN
Russian Krivak IV Class Frigates REACH Shipbuilders and Engineers
(GRSE) Kolkata.
Currently being built at Yantar Delivery originally planned for 2012
Shipyard, Kaliningrad, Russia. now scheduled for 2014
Delivery planned for 2012. Budget originally estimated at USD 622
Budget- USD 1,600 Million reported for Million, now revised to
the contract signed in July, 2006. USD 1,555 Million.
Progress is reported to be satisfactory despite These 4 Corvettes were planned to encourage
Russia’s past track record not having been very the participation of the Indian industry in naval
encouraging with the 3 Krivak class frigates ship building programmes. However, this has
built in 2004 all delivered post the delivery led to a delay of almost 24 months, with the
date. first delivery now scheduled only in 2014, and
the project cost has revved up to a staggering
Project 71
USD 1,555 Million.
Air Defence Ship - ADS
Project 75
Currently under construction at Cochin
Scorpene Submarine
Shipyard (CSL), India.
Delivery now planned for 2013 against Currently being built at MAZAGAON
originally planned for 2010 DOCKS (MDL), India.
Budget- Anticipated to be close to USD Delivery originally planned for 2012,
1,700 million against USD 450 Million now slated for 2015
when planned. Budget at USD 3,500 Million.
This is the first of the 2 planned Aircraft A total of 6 submarines are to be built in this
Carriers to be completely indigenous. programe.
The carrier was initially delayed due to Russia’s These vessels are similar to the ones being
inability to supply the steel required for the delivered to the Chilean’s and the Malysian’s,
building. Subsequently design changes however they are being built in India. The
including those impacting the length of the scorpene programme has been plagued by
carrier caused further delays. accusations of impropriety since the beginning.
The latest news concerns crucial parts which
It is now generally accepted that the delivery
were to be bought from Aramis (original
will take place only in 2015
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

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competitive bidding and consequently the During a sea-trial in Novemeber 2008 in the
prices of these components were not frozen Sea of Japan, A fire extinguishing system went
earlier. This has led the programe coming to a off by mistake, killing 20 people onboard.
halt, with the first SCORPENE now only slated However, in spite of these difficulties, the
to be delivered by 2015. Russian Navy inducted the NERPA in December
2009, and will eventually lease out to India by
Advance Technology Vessel (ATV) - INS the first half of 2010.
ARIHANT
Mine Counter Measure Vessel (MCMV)
Currently undergoing final fitment at
Vishakapatnam, India. Project under technical evaluation of
Delivery planned for 2011 bids submitted by Intermarine, Italy
Budget unknown and Kangnam Shipyards, South Korea
2 MCMVs to be bought, rest to be built
Arihant was positioned as India’s response in at GSL.
the field of a Miniature Heavy Water Nuclear These MCMVs are replacements for
Reactor. the Pondicherry class of MCMVs to be
The first vessel of this programe was a phased out.
Technology Demonstrator, However at its Delivery originally planned for 2008,
ceremonial launch on 26th July, 2009, the now anticipated in 2011.
Nuclear Reactor and other associated systems Original Budget: USD 1,000 Million
were not onboard.
This programme includes a total of 8 vessels,
The vessel is slated to join the Navy only 2011, with 2 being bought off the shelf and the
after almost 2 years of trials. remaining 6 being built in India at GSL. The
programme was initially proposed in May
This programe has a total of 5 nuclear 2004.
submarines under it. The design of these
submarines is similar to the RUSSIAN CHARLIE- India was supposed to retire its ageing fleet of
II class. Incidentally India had leased one such Pondicherry class of MCMV’s that have been in
submarine in 1988 and re-christened it INS service since 1970-80.
CHAKRA.
Both Intermarine, Italy and Kangnam
Project 971 Shipyards, South Korea are going through the
technical evaluation process currently which is
Shchuka-B - K-152 Nerpa a.k.a. INS Chakra anticipated to complete by early to mid 2010.

Already inducted into the Russian Fleet Replenishment Tanker


Navy, to be transferred to Indian Navy
in early 2010 2 tankers ordered on Fincantieri, Italy.
Budget- USD 650 Million First tanker currently being built at
Liguria, Italy.
India had signed a contract with Russia for a 10 Delivery of the first tanker planned for
year lease for this submarine and had paid for 2010.
its completion. Original Budget- USD 54 Million

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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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