Pipavav Defence pact with Russian submarine repair major

Pipavav Defence, a part of the Anil Ambani-led Reliance Group, on Tuesday announced a pact with Russia's JSC Ship Repairing Centre for medium re-fits and certification of the 877-EKM Submarines in India -- a project potentially worth Rs.11,000 crore ($1.7 billion).

"This will also mark the first time the work for refit of submarines is being considered for the private sector in India. The indicative value of work proposed to be undertaken by the proposed joint venture is approximately Rs. 11,000 crore," Pivavav Defence said in a statement.

The Indian entity proposes to execute the program with 51 percent stake in the new venture as per the norms prescribed by the Ministry of Defence and forms a significant step forward in "Make in India" and "Skill Development" initiatives of Prime Ministrer Narendra Modi, the company said.

Under the terms, the Russian company will provide complete technical assistance and support to the venture in areas including enhancement of infrastructure of Pipavav Defence and training. Its technicians will also be closely associated with the first refit to be carried out in Russia.

"Refit and modernisation of submarines is an ongoing need for our 'Blue Water Navy'. Pipavav and Zvyozdochka are deeply committed to playing an enabling role in enhancing naval preparedness, so vital for our national security," a spokesperson for the Indian company said.

A refit in India, the official said, has several advantages - saving on transportation costs and enhancing the operational availability of the submarines for thousands of additional hours by avoiding the downtime in transporting them to Russian and back.

The 877-EKMs - designated as Sindhughosh, Kilo-class diesel-electric submarines -- have been in active service with the Indian Navy since 1986 in a contract between Russia's state-run company Rosvooruzhenie and India's Ministry of Defence (India).

Zvyozdochka, founded in 1954, is the premier ship-repairing centre in Russia and undertakes such work for warships and submarines of the Russian Navy. So far, 120 submarines and 90 warships have upgradaded and refurbished by it.

The Zvyozdochka team had surveyed all shipyards in India, both in the public and private sector.

The pact between Pipavav Defence and JSC Ship Repairing Centre comes close on the heels of the Indian company having been chosen by Russia to jointly build the Grigorivich class frigates for the Indian navy, as upgraded versions of Talwar-class ships, or the Krivak-IIIs.

At least two senior officials from the defence ministry had said that a team from Russia had evaluated three-four private and state-run shipyards for a partnership, as a pre-condition for the estimated $3-$3.5 billion order.

On the same day, chairman Anil Ambani had also announced an additional investment of Rs.5,000 crore as part of India's emphasis on "Make in India" for military hardware and cut imports.