The Ministry of Defense has put on hold the proposed joint venture between government-owned Mazagon Dock Limited (MDL) and Pipavav Defence and Offshore Engineering Company Limited.
According to a statement issued by the ministry, Defense Minister Arackaparambil Kurian Antony informed a meeting of the Defense Consultative Committee ‘that the ministry had decided to put on hold the joint venture of Mazagon Dock Limited (MDL) till a policy on JVs is put in place by the Government’.
Antony also said his ministry would study the complaints received from private shipyards protesting the JV. “The issue needs to be fully examined and settled before any forward movement takes place on this front,” the statement quoted him as saying. Significantly, the statement also has him saying that JVs must compete for contracts and should not get them on nomination basis.
Earlier this month, MDL and Pipavav has announced the formation of a 50-50 joint venture for sharing the work on the warship-building contracts received by MDL. The announcement received protests from other private shipyards like Larsen and Toubro and ABG Shipyard. Bharati Shipyard refused to acknowledge the announcement and wrote a letter to MDL asking for the deadline for the submission of proposals for the joint venture.
MDL is one of the largest warship-building shipyards in the country with orders that some reports say could go up to INR 1 lakh crore (USD 20 billion).