Indian MoD Details Shipbuilding Projects

Government constantly reviews the security environment and decides about induction of appropriate defence equipment/platforms, including various kinds of ships/submarines for the Navy. This is a continuous process undertaken as per the Defence Procurement Procedure (DPP) from various indigenous as well as foreign sources for the modernization of armed forces to keep them in a state of readiness to meet any eventuality. Proposals for induction of naval ships are based on the Maritime Capability Perspective Plan (MCPP)/Five Year Plan/Annual Plan which stipulates the number and type of vessels required as well as timelines for such inductions. Divulging further details would not be in the national interest. Major warship construction projects of the Navy running behind schedule include Project-15A (P-15A) and Project-17 (P17). The cost escalation in these two projects has been about 225% and 260% respectively. The major cost escalation & delay has been due to uncertainties associated with the complex warship building process. Reasons for delay and cost escalations in respect of P-15A and P-17 are as follows: -- P-15A: The main reasons contributing towards cost escalations are - delay in supply of warship building quality steel by Russia, escalation due to increase in expenditure towards services of Russian specialists on account of inflation during the build period, impact of Wage revision due from October 2003 and finalization of cost of weapons and sensors. -- P-17: The main reasons contributing towards cost escalations are - delay in supply of warship building quality steel by Russia, delay in acquisition of weapon equipment from Russia, and delay in finalization of propulsion equipment in view of complex combined diesel and gas arrangement introduced for the first time in Indian Navy frigate.