Reliance Defence, L&T in final race for $2 bn Navy contract: report

Reliance Defence and Engineering Limited (RDEL) and Larsen and Toubro are in the final stages of bagging a $2 billion contract from the defence ministry next month for making amphibious fighting ships for the Indian Navy, a report said.

Both have entered the final lap after ABG Shipyard failed to clear the capacity assessment test of the defence ministry, The Hindu said citing sources.

The ministry of defence (MoD) is likely to open bids in October for awarding four Landing Platform Dock (LPDs), each costing about $1 billion, and the only two private sector firms which cleared the financial and technical capability for this project are RDEL and L&T, the source close to the development said.

As per the terms of the deal, the two LPDs contract will be awarded to a private sector player based upon technical capabilities and financial bids and the winning private sector firm would assist state-owned Hindustan Shipyard Limited (HSL) to construct the remaining two.

LPD, also known as amphibious transport dock, is a warfare ship designed to transport troops into a war zone by sea, primarily using landing craft and has the capability to operate transport helicopters in addition to having hangar facilities and a landing deck.

The $2-billion contract is the biggest warship construction project for the private sector and has the potential to make the winner a leading player.

The 20,000 ton LPD would be the largest warship to be built in an Indian yard after the aircraft carrier under construction in Kochi.

A Reliance Defence spokesperson declined to offer any comments while an L&T spokesperson said, ''We have already cleared the financial and technical capacity assessment report long time back.''

''The Defence Acquisition Council (DAC) in its last meeting has cleared the capacity assessment of RDEL, which is now eligible for all defence projects particularly Naval Warships and Submarines,'' the source said.