L&T, ABG Shipyard question Mazagaon's pact with Pipavav

Mazagaon Dock's choice of Pipavav Shipyard as its proposed naval joint venture partner for building warships has embroiled in a controversy with two other bidders, ABG Shipyard and Larsen and Toubro (L&T), questioning the selection process.

Both the companies, in their separate letters to Mazagaon Dock (MDL), said that they had not been given a chance to respond to MDL's proposal to become the joint venture partner, despite making presentations to the defence PSU on August 23 and submitting their expression of interest (EoI).

Both the companies have forwarded their letters to Defence Secretary, Defence Production Secretary and Chief of Naval Staff, while requesting Mazagaon Dock to reconsider its decision.

On September 12, Pipavav announced that it had been selected by Mazagaon Dock as its equal joint venture partner for construction of warships and submarines among others. The move would be the first example of public-private partnership in the defence sector.

"No timeline was indicated for submission of the detailed JV proposal, nor was any evaluation criteria discussed or made available.

"However, ABG was surprised and dismayed to learn from the print and electronic media ....That MDL had already selected the 50:50 JV model of collaboration and Pipavav Shipyard as its partner, even before ABG could respond to MDL's request," ABG Shipyard said in its letter written to the defence PSU on September 14.

L&T Heavy Engineering, an arm of Larsen and Toubro, said in its letter dated September 13, that "no guideline was mentioned regarding the criteria for selection of JV partner".

It added that among proposed model of synergy, MDL had sought further details including major terms of reference regarding joint venture model from L&T on August 25.

"However, no specific timeline was mentioned for submission," L&T's letter further said, adding that "with the above mentioned in view, it is rather surprising to learn that MDL Board has reportedly selected Pipavav for 50:50 joint venture without waiting for L&T response".

In its letter, ABG Shipyard also questioned the capabilities of Pipavav. "The basis for selection of Pipavav Shipyard, which is yet to deliver its first ship, over ABG Shipyard, which has had rich experience of delivering 142 ships over the last two decades, is not clear," ABG Shipyard said.

Officials of MDL were not available for comment, while e-mails sent to Nikhil Gandhi, promoter of Pipavav Shipyard remained unanswered.