Defence ministry puts Mazagon-Pipavav JV on hold

MUMBAI: The defence ministry has put on hold the country’s first public-private partnership in the sector following complaints of lack of transparency. Mazagon Dock, the country’s largest defence shipyard, and private shipbuilder Pipavav Defence and Offshore Engineering had agreed earlier this month to jointly build warships and submarines for the navy.

Following objections raised by other shipbuilders over the selection process, the ministry has decided to wait for the government to come out with a policy on such partnerships. “The defence ministry has decided to put on hold the joint venture of Mazagon Dock Ltd (MDL) till a policy on JVs is put in place by the government,” Defence Minister AK Antony said in a statement, adding that the ministry would study the complaints received from some private shipyards regarding the JV.

Anthony also said that JVs must compete for contracts and should not get them on nomination basis. “The issue needs to be settled before any forward movement takes place,” he added. Mazagon Dock, however, said it was unaware of any such development. “We have no information regarding any action taken with regards to the deal,” said Mazagon Dock CMD HS Malhi. Pipavav Shipyard said it was confident about the process.

“We are happy that the ministry has interfered. We stand the chance of facing a scrutiny and we are confident that we will come out clean,” said Nikhil Gandhi, chairman of Pipavav Defence and Offshore Engineering. The proposed deal will see the joint venture execute the current order book of state-run Mazagon Dock worth .`1 lakh crore and look for new orders jointly. Last year, the government decided to allow public-private partnership in its four shipyards following capacity constraints.