MoD prepares draft policy for warship manufacture JVs

New Delhi: Two months after it put all joint ventures between government and private shipyards on hold, the ministry of defence (MoD) has now prepared a draft policy which will attempt to plug all possible loopholes.  The MoD acted after receiving complaints from some private shipyards, which protested the formation of a joint venture for manufacturing warships between state-owned Mazgaon Docks Ltd and private shipyard Pipavav Defence & Offshore Engineering Ltd, saying there was a lack of transparency in the process followed.

MoD sources said the draft policy for such joint ventures had been sent to the ministries of commerce, finance, law and justice and corporate affairs for comments. Once responses were available tehdraft with due amendments would be forwarded to the cabinet committee on security (CCS) for final clearance.

After staying the JV between Pipavav and MDL defence minister AK Antony had said that as a public sector entity, MDL, was nominated for important projects and it was not up to it to hand over those contracts to Pipavav or any other entity. He said any shipyard should compete with others for those contracts.

Plagued by a huge backlog of orders, the MoD had initially allowed shipyards to form joint ventures.

But MDL's JV with Pipavav raised a stink with a prestigious engineering firm like L&T protesting.