Challenges with Project-75I Tender

The project-75I has been another interesting case of defense procurement which is undergoing lot of challenges. Few months back it was reported that the defence ministry has given its approval for the amendment into the P-75I tender released last year which would allow the project to move forward. The request was made to defence ministry for the removal of clause: “joint & severe liability” from the tender according to which the foreign partner will be only responsible & liable for their work share in the project. Indian Navy is in discussion with three foreign OEMs from Germany, South Korea and Spain, While France & Russia has pulled out the tender.

Germans are back!

Interestingly Germany which initially pulled themselves out of the tender is now seems to be participating.

There is another reason cited by the foreign OEMs which makes the tender challenging is the percentage of indigenous content. As per reports, the MoD has demanded 45 per cent indigenisation in the first submarine and 60 per cent over all six boats in the order. This ask seems to be “impossible high indigenisation” by foreign OEMs which is not. Mazagaon Dock Limited and L&T have experience as well as ecosystem of constructing submarines. India is also constructing advance nuclear power SSBNs.

At present there are two contenders for the project-75I – Germany and South Korea. South Korea which was seen as a major contender for this project seems having problems too. As per reports, the Korean Banks will not allow this bid as they see lot of financial risks as per the RFP. Further the South Korean firm DSME has not yet got approval for sell of submarines to India from its government.

Why is Germany considered to be leading?

This brings Germany ahead in the competition, but it would be a single vendor situation. To avoid this MoD has asked the HDW of Germany to make two separate bids – one with MDL and another with L&T. Interestingly, the collaboration with HDW is not something new for MDL. Indian Navy is currently operating 4 Shishumar or Type-209 Class submarine. The first two vessels were built by HDW in Germany, while the remaining 2 were assembled by Mazagon Dock Limited under a technology transfer agreement but with very little indigenous content. A multi-disciplinary design team was also trained for almost two years in Germany to acquire knowledge of HDW submarine design with access to relevant software, design data, empirical formulae, linked values of design coefficients and were considered capable of designing a conventional submarine. This team now forms the backbone of Submarine Design Group (SDG) - a premier organisation of the Indian Navy.

But Irony is that still India cannot design an indigenous submarine. However, you would be surprised to know that the South Korean firm DSME which is a contender for Project-75I has designed its submarine based on the ToT of Type-209 submarine from Germany. Of course, DSME has refined the design further.

Germany’s mature AIP Tech

One more reason for Germany being strong contender for the project 75I is their fuel cell-based AIP propulsion. The AIP system developed and deployed by the HDW has no moving parts. That makes detection of such a submarine virtually impossible. HDW Class 212, HDW Class 214 and HDW Class Dolphin AIP submarines are powered by an HDW fuel cell plant. The operational fuel cell-based AIP is one of the main criteria of Indian Navy where HDW fits pretty well.

Pakistan has also tried to acquire the HDW’s latest Type 214 class in the mid 2000s. The deal was very close to being reached but fell through when Pakistan opted for a more affordable & Cheaper submarine which does not have a proper engine to power as German firm MTU refused to supply MTU396 diesel engines to China. Citing the same reason, Thailand has also rejected the deal to procure Chinese submarine.

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