Pipavav Defence & Offshore Engineering Co Ltd (PDOC) has announced a joint venture (JV) with Russia's JSC Ship Repairing Centre Zvyozdochka for medium refits and life certification of eight EKM 877 submarines in the country.
This positions PDOC nicely for overhauling India's nine Russian-origin kilo-class submarines, and several identical submarines operated by other regional navies.
Pipavav, in which Anil Ambani-led Reliance Group is in the process of acquiring a majority stake, proposes to execute the programme under a joint venture with 51 per cent stake, consistent with MoD regulations, a company statement said.
This would be the first time the work for refit of submarines was being considered for the private sector in the country. Right now, only defence PSUs take up submarine refit job. The indicative value of work proposed to be undertaken by the proposed joint venture is approximately Rs 11,000 crore ($1.7 billion).
Under the agreement, Zvyozdochka will provide complete technical assistance and support to the JV, including for the enhancement of infrastructure at the PDOC facilities, training of engineers, and the like. PDOC technicians will also be closely associated with the first refit to be carried out in Russia.
Refitting a kilo-class (or 877 EKM) submarine in India offers advantages like cheaper labour costs and saving on transportation to Russia and back. It also provides opportunities for indigenizing sub-systems in the submarine, and develops expertise.
According to PDOC, the skills and experience developed by the JV will position it favorably for undertaking similar work for large submarine forces of similar class deployed by countries such as Algeria, Vietnam and Iran, with potential additional revenues of about Rs.20,000 crore.
Zvyozdochka, which conducted a survey of several Indian shipyards in both the public and private sector, has also informed the Indian defence ministry on its selection of Pipavav for the Medium Refit and Life Certification of Kilo class submarines in India.
It is unclear whether the defence ministry is committed to the new venture between PDOC and Zvyozdochka; and, if so, whether it would change the arrangement it has already cleared.
