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Friday, July 19, 2024

Navantia and Larsen & Toubro Sign Agreement to Bid For $5 Billion Submarine Tender

The 4.8 billion euros ($5.26 billion) submarine tender for the Indian Navy has become much more competitive with the addition of Spain’s Navantia to the fray. The Spanish state-owned defense firm is vying for the contract alongside Germany’s Thyssenkrupp Marine Systems (TKMS) and India’s Mazagon Dock Shipbuilders Ltd (MDL).

On Monday, engineering and construction major Larsen & Toubro (LART.NS) signed a teaming agreement with Navantia to bid for the project jointly. The pact comes less than a month after the German company inked an agreement with state-run MDL to form a consortium.

According to the agreement, L&T and Navantia would submit a techno-commercial bid for the Indian Navy’s submarine tender under Project-75 (India). The project is the most significant procurement in the country’s defense sector, valued at over $5 billion, and will be followed by a 30-year lifecycle sustenance contract.

The bidding process for the submarines, which will be built under the strategic partnership model of the Make in India initiative, is expected to end in August. The defense ministry will announce the winner later this year or early next year, officials said.

Under the deal, Navantia would be responsible for the design of the P75 submarines, which will be based on its S80 class of vessels. The first of these was launched in 2021 and is currently undergoing sea trials ahead of delivery to the Spanish Navy by the end of 2023. The firm has also designed and built the Scorpene submarines in collaboration with DCNS (now Naval Group) of France which have been exported to Chile and Malaysia.

Navantia has been vying for the contract since it was made public in 2008. At the time, Australia’s Liberal government had decided to limit the number of submarines that could be built locally to two due to concerns over shipyard capacity and anger from labor unions and independent Senator Nick Xenophon that the ships would not be constructed in Australia.

As the lead designer of Australia’s new Submarine Rescue Mothership, Navantia has also been working with local company JFD to conduct a Ship Survey and Suitability Assessment for the vessel. The contract will see JFD, a world leader in submarine rescue systems, conduct an initial assessment of the Spanish company’s preliminary design.

The assessment will include a detailed look at the submarine’s capability and suitability to host the Australian military’s new rescue vessel. The project has been running into problems and was stalled in 2011 when it emerged that the Spanish ship was too heavy to surface correctly. A ‘decimal point error’ cost the project 14 million euros, with engineers making adjustments to improve buoyancy. Navantia seeks to internationalize its business and has contracts in Australia, the United States, Norway, Turkey, and Saudi Arabia. It has also been involved in developing uncrewed vehicles, which are used for surveillance and rescue missions. Navantia also has plans to expand into green energy, with offshore wind among its target areas.

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