Defence Min puts Pipavav-Mazagon JV on hold

The Defence Ministry has put Pipavav Shipyard's proposed naval joint venture with Mazagon Dock (MDL) to build submarines and warships on hold after rivals cried foul.

Pipavav and Mazagon have a 50:50 stake in the JV.

Some private shipyards, including Larsen & Toubro and ABG Shipyard, had written a letter to the ministry of defence and the National Security Advisor (NSA), alleging lack of transparency and arbitrary decision-making by MDL.

The ministry said it will study the complaints from the private shipyards regarding the JV. It has reiterated that the JV must compete for contracts and not get them on nomination basis.

Fraught with capacity log jams, the government had decided to opt for public-private partnerships (PPP) for four government shipyards with their private sector peers.

MDL is the largest of the four and at stake are defence contracts that could go up to a staggering Rs 1 lakh crore.

Ever since news broke out of Pipavav's successful bid, its competitors have questioned the transparency of the whole process.