Asia PacificBusinessSea

$5.1 billion India-South Korea minesweeper deal talks collapse – reports

A 32,640 crore rupees (Rs 326.4 billion, $5.1 billion) deal between India and South Korea to manufacture 12 new mine counter-measures vessels has collapsed, according to reports.

Hindustan Times reported on Monday, January 8, that the project to manufacture the highly specialised vessels designed to detect and destroy naval mines which were to be built by Goa Shipyard Limited in collaboration with Busan-based Kangnam Corporation was one of the highest value contracts in Prime Minister Narendra Modi’s Make in India initiative.

Negotiations collapsed at the final stage, Hindustan Times reported GSL chairman retired Rear Admiral Shekhar Mital as saying. “We were unable to resolve commercial complications despite our best efforts. This particular deal with the Koreans is off,” Mital said, adding that defense minister Nirmala Sitharaman had made the decision.

The Indian Navy’s current four-vessel mine counter-measure fleet was purchased from Soviet Union in the 1970s and is set to be decommissioned between 2018 and 2020. Two other ships were decommissioned in 2017.

The navy began the procurement process for the MCMVs in July 2005. Construction of the first new vessel was to begin in 2018, and all 12 were to be finished by 2026.

“Goa Shipyard has been asked to issue a new global expression of interest (EoI) for the MCMVs. The fresh RFP (request for proposal) or tender will follow thereafter,” an unnamed source told The Times of India.

“Final negotiations with Kangnam were stuck for long because it wanted deviations from the original RFP. There were also some ToT (transfer of technology), build strategy and cost problems,” an unnamed source said.

Mital said that GSL had finalised technical details and specifications for the vessels over the last two years, and that the vessels are expected to have 60% indigenous content.

GSL has already invested more than 700 crore rupees ($110 million) in building infrastructure for the construction of the MCMVs, TOI reported.

India to buy $270 million-worth of Israeli missiles and Russian bombs

South Korea begins jet deliveries to Thailand

Separately, Yonhap reported on Monday that Korea Aerospace Industries began delivery of T-50 trainer jets to the Royal Thai Air Force.

In 2015, KAI received an order worth $110 million to build four T-50TH trainer jets and a second $260 million contract to build eight jets in 2017.

KAI says it has exported a total of 64 T-50 trainer jets worth $2.9 billion since 2011.

Tags
Show More

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *