Govt issues guidelines for award of shipbuilding tenders

Government today said it has issued guidelines for award of tenders for shipbuilding and repair works for PSUs and departments under which Indian shipyards will be granted 'right of first refusal' to enable them to compete with foreign players.
"Government departments or agencies including PSUs procuring any type of vessels for governmental purposes or for their own use or requiring ship repair shall henceforth, till 2025, grant 'Right of first refusal' to Indian shipyards to enable them to match the lowest rate offered by the foreign bidder," the Ministry of Shipping said.
It said the government has issued guidelines for evaluating and awarding tenders for shipbuilding, dry-docking and ship repair works for government departments or agencies, including Public Sector Undertakings.

Further, from 2025 onwards, only Indian-built vessels shall be procured by such departments and agencies for governmental or their own work.
Such departments and agencies have to undertake bulk tendering for their entire vessel related requirements with deliveries starting from 2017-18.
This is in line with international practice where many countries, in order to provide dedicated order-book support to domestic shipyards, place their ship acquisition, repair or chartering requirements on their shipyards.

It was also decided that prior experience in building or repairing a specific type or size of vessel shall not be a criterion for determining the eligibility of Indian shipyards, provided the shipyards possess adequate capability, it said.

The development follows the government recently approving a proposal for financial assistance of 20 per cent for ships built in the country in a bid to promote the shipbuilding industry under the 'Make in India' initiative.
Cabinet had approved the policy in December last year.
The implementation of the policy, which would be in force for 10 years, requires a budgetary support of Rs 4,000 crore.
Promotion of shipbuilding and ship repair industry has "the same impact as the infrastructure sector due to higher multiplier effect on investment and turnover (11.6 and 4.2) and high employment potential due to multiplier effect of 6.4," government had recently said.

Besides, shipbuilding is a strategically important sector due to its role in energy security, maritime defence and for developing heavy engineering industry.