Corporate rivalry forces joint venture between India’s biggest state-owned warship builder, Mazagon Docks Ltd, and the private sector Pipavav to be put on hold. The joint venture was announced earlier this month to produce warships on the order books of MDL, where the production capacity is stretched. MDL is to deliver seven major warships and six submarines over the next few years to the Indian Navy. An order for another three submarines is expected soon. With the JV, India would have outsouirced construction of major warships to the Indian private sector for the first time. The JV would have processed order worth billions of dollars.

Defence Minister A.K. Antony said the decision to put MDL-Pipavav JV on hold follows complaints by some rival private shipyards. Engineering giant L&T has made substantial investment in developing a shipyard in Tamil Nadu, and has contested the JV.

Policy on JVs between defence PSUs and the private sector to be put in place first, says Antony. Also, JVs must compete for contracts and will not get these on a nomination basis. India has recently announced that all its warships shall henceforth be Made in India.

Antony said the ministry will study the complaints received from some private shipyards regarding the JV. ‘The issue needs to be fully examined and settled before any forward movement takes place on this front. He also said that JVs must compete for contracts and should not get them on nomination basis. “We are treading on a new path and we would like to ensure that transparency is maintained at all levels.”