Barely 24 hours after Pipavav Shipyard announced that it had tied up with Mazagon Dock to build warships, other bidders in the fray are questioning the way the deal was struck with ‘total lack of transparency'.
Sources said Larsen & Toubro, ABG Shipyard and Bharathi Shipyard, which were in the race, have got together to take up the issue with the Defence Ministry, Mazagon Dock and the National Security Advisor.
They alleged “total lack of expertise and track record” of Mazagon Dock's ‘partner of choice'.
The industry is taken aback by the haste in which the deal was concluded within a fortnight of the presentations made by four shipbuilders, sources said.
Mazagon Dock Ltd (MDL) issued an expression of interest in March 2011 seeking to partner Indian private-sector shipyards to meet the challenging timelines for liquidating its order book.
Following the responses, MDL directors and a team of officers visited the private shipyards to evaluate their capability.
The shortlisted four made individual presentations to the MDL board on August 23, proposing business plans and joint collaborative strategies.
On August 25, MDL sent letters to shipyards seeking details of the joint venture and business plans proposed by them.
Then, on September 9, the MDL board decided on the formation of the joint venture with Pipavav Shipyard.
Pipavav Shipyard, too, without waiting for the formal government approval, went ahead to make the announcement.
Sources alleged that Pipavav was yet to deliver its first vessel and lacked experience in detailed design. Its first bulk carrier under construction has been delayed, and inordinate delays in commencement of other confirmed orders have led to cancellations.
The construction of 12 offshore supply vessels for Oil and Natural Gas Corporation, for which order was secured in June 2009 and which at $9.33 million each, was is 50 per cent lower than the next best bid, is yet to begin.