Pipavav set to win $920-cr Coast Guard order for fast petrol vessels

Pipavav Defence and Offshore Engineering Company Ltd is set to win a Rs920-crore order for building 14 fast petrol vessels (FPVs) for the Indian Coast Guard, with the private sector shipbuilder emerging as the lowest bidder.

The company said in a filing with the stock exchanges that the Indian Coast Guard has declared it as the lowest bidder for design and construction of 14 FPVs under the competitive bidding process.

FPVs are used for patrol within exclusive economic zone, coastal patrol, anti-smuggling, anti-piracy and search and rescue operations.

Pipavav had earlier secured a much larger contract, worth about Rs2,975 crore, from the defence ministry for building five ships for the Indian Navy. And, with the government focusing on enhanced local defence production with private participation, Pipavav expects more orders to follow.

The Navy and the Indian coast guard together are expected to spend over Rs50,000 crore on vessels and equipment over the next 10-15 years.

With the global economic downturn casting a shadow on building merchant vessels, the competition for a pie of the defence contracts is expected to hot up.

Pipavav Defence has, meanwhile, formed a joint venture with state-run Mazagon Docks Ltd to build warships for the Indian Navy.

The government cleared the proposal in July this year after deferring a decision on it in September last year, following objections by other shipbuilders and for lack of transparency.

Pipavav had, earlier, said it was looking forward to joint marketing initiatives to tap the growing global demand for warships and submarines through its joint venture with Mazagon Dock.

The company said it had ''submitted bids worth $2 billion in various countries with respective local partners.''