On the oceanfront

Reliance Infra's reported acquisition of stakes in Pipavav Shipyard and the media buzz about more such ventures in the offing, involving private shipyards, must be considered in the context of the government’s much touted “Make in India” policy. It also draws attention to our floundering ship-building programme and the efforts to counter the growing influence of China and others in our backyard. The apparent triggers are the recent reports about China’s plan to build large numbers of 054A class frigates and 052D class destroyers to escort future aircraft carriers and our growing anxiety about delayed deliveries.

While the Navy was perhaps the first off the blocks with regard to indigenous shipbuilding over 50 years ago, we have been unable to capitalise on the early start and improve our pace of construction. 

Public sector shipyards, which dominated defence shipbuilding till recently, were blamed for the ills that plagued the defence shipbuilding industry. Capacity constraints, low productivity, archaic and cumbersome procedures were the oft-repeated reasons for delays and cost overruns.

Therefore, the much awaited entry of private shipyards into the fray about five years ago was welcomed by the Ministry of Defence (MoD) — Navy and Coast Guard included. The defence ministry's eagerness to get out of the clutches of PSU shipyards had to do with private shipyards creating modern infrastructure and inducting new technologies for modular construction during the phase of the shipping boom. 

With the combined projected requirement of the MoD over the next five years or so being about 180 platforms (including auxiliaries), the participation of private shipyards with large spare capacities was expected to result in a win-win situation for everyone. Besides reducing build periods, improving quality and reducing costs, it was also expected to foster healthy competition.

However, a reality check today would reveal otherwise. Despite large requirements, availability of latest technology and spare capacities, deliveries continue to be delayed. In fact, the total number of MoD ships delivered by all shipyards last fiscal year was just 17 — less than half the numbers required to be delivered annually to meet MoD projections.

This paradoxical situation can be attributed mainly to the acute financial crisis plaguing almost all private and a few PSU shipyards as well as non-standardisation of design which has prevented series production.
Lack of design standardisation for even auxiliaries and non-weapon intensive platforms has led to excessive delays in contract conclusion (at times taking two years for even barges) due to protracted technical evaluation necessitated by having to scrutinise numerous designs submitted by competing shipyards. 

More delays occur post conclusion of contract due to drawing approvals, model testing, detailed design, interaction with classification societies and owners, sourcing of material, inspections etc affecting smooth progress of construction. Work, therefore, progresses in fits and starts leaving the subcontractors vexed as they struggle to retain their workforce due to cash flow problems.  

Along with infusion of funds through strategic acquisitions of stakes — like in the case of Reliance Infra — project funding, tax incentives, shipbuilding subsidy, purchase preference, deemed export benefits etc, would substantially ease the grim financial condition of the shipyards. But, there is an urgent need to standardise designs and facilitate mass production. 

Design standardisation would also help in correct cost estimation, quick contract conclusion and expeditious construction. Training, operation, maintenance and logistics support post-induction would become easier in reducing revenue expenditure substantially.

A glance at the achievements of leading shipbuilding nations would reveal the benefits of standardisation. For instance, 2,710 “Liberty Ships” were built to a standard design by 18 shipyards across the US during World War II averaging a mind-boggling production rate of 1.4 ships per day. Similarly, the erstwhile Soviet Navy was replete with examples of standardisation. Closer to home, 18 ferries, each with a capacity to carry 150 men, were built for the Andaman & Nicobar administration a decade ago by four Indian shipyards to a standard design produced by National Ship Design and Research Centre (NSDRC), Visakhapatnam.

So how does one go about standardising MoD platforms? To start with, an examination of the MoD platforms would reveal that 80% of ships like Offshore Patrol Vessels (OPVs), Fast Patrol Vessels (FPVs), Landing Ship Tanks (LSTs), tankers, training ships, survey ships, auxiliaries etc are non-weapon intensive. However, a closer scrutiny would reveal multitude designs for the same class of ships. For instance, there are seven designs of OPVs and five designs of FPVs currently in service or under construction highlighting the urgent need for standardisation.

Existing designs of such platforms duly modified to incorporate operating experience of the Navy and Coast Guard could form the base for standardisation. Once designs are standardised and build periods reduced, these ships, particularly OPVs and FPVs, could be exported as there is a huge demand — 265 OPVs are valued at approx US$57 billion, as per OPV Global Market Report 2014.

Standardized design of auxiliary vessels like barges, ferries, tugs could also be adapted for ports, coastal and inland shipping to increase volumes. Since one barge can accommodate almost 75 truckloads of cargo, transportation costs, fuel consumption, load on highways and carbon emissions could be reduced drastically.

To kick start the process, past experience of NSDRC could be leveraged and the organisation revived to standardise designs for 80% of MoD ships. Being co-located at Visakhapatnam with Naval Science and Technological Laboratory (who have facilities for model testing and design validation) would be an added advantage. NSDRC could also be the designated nodal agency to introduce new technology in shipbuilding and ensure compliance with the latest MARPOL conventions. 

Once standardized, these designs could become government property on which all future tenders could be based. The design package could be procured by the L1 bidder from NSDRC at pre-determined price. The sale of design package could make NSDRC self-sustaining and it could evolve into a centre of excellence. 

Availability of standardised design, composite drawings and bill of material would allow expeditious construction and reduce build periods due to series production effect. These non-weapon intensive platforms could be built to Classification Society Rules and the standardised bills of material effectively utilised to drive indigenisation effort.

Needless to say that a vibrant and flourishing shipbuilding industry would boost our ailing manufacturing sector as practically all industries contribute towards shipbuilding. Servicing of these platforms would also improve employment opportunities along the coast and riverfront.

Neglecting this vital area, on the other hand, would condemn us to a reactive role — eternally trying to play catch-up in the emerging maritime scenario. The choice is ours! 

The author is the former Director (Shipbuilding) at Hindustan Shipyard Ltd, Visakhapatnam