by Manu Pubby

It is unclear what changed within a few hours, but the Rs 20,000-crore contract for landing platform docks (LPD) has been in the middle of a brewing corporate war, with allegations of favouritism and supplying insider information making their way to the ministry.

On the eve of the monsoon session, the defence ministry has decided to play it safe, postponing a decision on a warship deal that would have given the winner a Rs 20,000-crore contract under the Make in India initiative. 

The commercial bidding process for four amphibious warships to be made in India has been stuck for over a year now after L&T and Reliance Naval & Engineering Limited (RNEL) were shortlisted by the ministry. 

In a day of u-turns, top executives of both the companies were summoned to South Block for the opening of commercial bids, which would have decided the winner of the contract. A relatively short notice of a few days was given to the executives to be present for the purpose.

L&T officials, including a board member, flew down from Mumbai and senior RNEL representatives landed up at Navy HQ at the summoned time, only to be asked to wait for over an hour. At the end of which they were informed without any explanation that the bid opening has been deferred. “The opening has been deferred for now,” a defence ministry official confirmed to ET, without elaborating on the reasons for summoning and abrupt change of plans. The executives — who were not even addressed by any senior ministry official — refused to comment.

It is unclear what changed within a few hours, but the Rs 20,000-crore contract for landing platform docks (LPD) has been in the middle of a brewing corporate war, with allegations of favouritism and supplying insider information making their way to the ministry, as reported by ET.

RNEL, which has originally bid for the contract in its earlier avatar as the Pipavav Shipyard, has filed an official complaint alleging a top Navy officer in charge of the selection process has been favouring L&T with confidential information. L&T has been pointing out the financial difficulties and debt restructuring issues that have afflicted RNEL, raising questions on its ability to complete the contract. This has resulted in further stalling of the mega contract.

The LPD has the potential to become the largest warship to be built in an Indian private sector shipyard. It is needed to move troops and equipment for an amphibious operation across the sea. Both companies have a foreign collaborator for design and construction — RNEL has joined hands with the French Naval Group and L&T’s partner is Spain’s Navantia Group.