Shares of Pipavav Defence sank over 3.5% in morning trade on Tuesday, after its joint venture with Mazagon Dockyard was put on hold by the Defence Ministry.
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.
Confirming the news on CNBC-TV18, Nikhil Gandhi, chairman of Pipavav Defence said that he expects to get clearance from the ministry in the next two-three weeks. "There is room for all players to form JV with government shipyards," he added.
At the moment, he said, there were three defence shipyards looking for JV partners. Here is the edited transcript of his interview. Also watch the accompanying video. Q: What is the communication from the defence ministry? What is your course of action at Pipavav, given that the deal has been put on hold?
A: From our perspective, it is good news because this joint venture will last for the entire life and it must go through all the scrutiny possible. Our strength should be vindicated if it has gone through a very transparent and elaborate process over almost eight months.
We think that the infrastructure of Pipavav Defence built is completely matchless. No one in the country is anywhere near the infrastructure of Pipavav Defence. Any joint venture has to have the infrastructure; otherwise, it is of no use to JV partners.
The government
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