PANAJI: With India and Russia inking the crucial agreement for the procurement of four guided missile frigates for the Indian Navy — including two ships which will be built by Goa Shipyard Limited (GSL) — the Vasco based-shipyard is now racing to ink a formal contract with the ministry of defence in order to complete formalities within the next two months, GSL officials said. 

The ministry of defence quietly inked the contract to purchase two frigates of the Project 11356 class, which will be bought directly from Russia’s Yantar Shipyard. While the two frigate hulls are already fabricated, India will procure the gas turbines from Ukraine and then integrate them onto the two vessels.

“The natural choice would be for GSL to integrate the engines on the first two frigates that will directly be sourced from Russia. But the engines could also be integrated in Russia. Nothing has been decided,” said an official.

Sources said that the long-pending project got the green signal during the summit between Russian president Vladimir Putin and Prime Minister Narendra Modi in October, but due to concerns over US sanctions, both governments waited to formally ink the agreements.

In an official note, GSL said that the umbrella contract for four upgraded Krivak III class frigates through two contracts includes two ships which will be built by GSL.

“A contract for follow-on ships is most likely to be signed within a month or two,” a GSL official said when asked about the two frigates that will be built in Goa.

Sources said India’s cabinet committee on security (CCS) has already sanctioned the purchase of the four frigates. Price negotiations with the Russians and the defence ministry have also been completed, they said.

The defence public sector undertaking’s operational profits over the last few years have hovered around Rs 450 crore, with its net worth doubling to Rs 909 crore.