Mazgaon Dock offer puts wind in pvt shipyards' sails

Private shipbuilding firms have a reason to smile. Defence shipyard Mazagon Dock, which has joined hands with Pipavav Defence, is now looking at partnering with multiple private yards for faster execution of pending and upcoming projects, reports Archana Shukla quoting sources.

In 2011, Mazagon Docks began preparing for a joint venture with Pipavav Shipyard, a move peers like L&T, ABG and Bharati Shipyard opposed, citing an unfair selection process. Also watch the accompanying video But now, with the defence ministry issuing fresh guidelines that make these joint ventures non-exclusive, other private participants will also get a piece of the large defence budget. Sources say Mazagon Dock has already selected L&T as another joint venture partner to execute part of an upcoming Rs 50,000 crore project to build six submarines. Apart from new projects, Mazagon Dock, in order to fast-track orders, is also considering to split existing projects with other defence ministry-approved shipyards. These include orders worth Rs 40,000 crore to build warships, frigates and destroyers. Pipavav Defence, ABG, Bharati and L&T are the four private shipyards approved by the ministry of defence to build warships. Experts say new yards like Pipavav may just get to manufacture hulls for warships, while experienced companies like L&T may be granted projects that are more technical in nature. This move by Mazagon Dock is to surely benefit large private shipyards troubled by a slowdown in commercial shipbuilding. The heavy backlog at Mazagon Dock will help keep operations and revenue-flows going for smaller companies as well. Besides, with other defence-ministry shipyards such as Goa-based Garden Reach and Hindustan Shipyards looking for similar alliances, the time is ripe for private shipyards to rake in the moolah.