India?s naval yards aim for the world

Garden Reach Shipbuilders and Engineers (GRSE) in Kolkata, India, is at an advanced stage of negotiations with French shipbuilding giant, DCNS (Direction des Constructions Navales Services), for jointly setting up a cutting edge design centre for warships and merchant ships. This will target both the Indian and the global markets.

GRSE?s Chairman and Managing Director, Rear Admiral TS Ganeshan, emphasises that negotiations are still underway, and that the GRSE board must clear the JV before any announcements can be made. But he is upbeat about the potential for the JV to handle design work outsourced from Europe and the US. The design centre is being set up with versatile, broad spectrum capabilities so that it can design warships as well as merchant ships and the yard hopes to carry out work for foreign shipyards, which find that the cost of their design manpower is too high.

Interestingly, GRSE confirms that a third partner is in discussions for this JV, Indian IT engineering company Infotech Enterprises which already designs systems for the US military, through a JV in Puerto Rico. Its 6,500 software engineers generated Rs 750 crore in revenue last year, most of it coming from the aerospace industry. It is hoped that the JV will be formed by August 2008, subject to clearance from the GRSE board.

JV that would handle design for all three defence shipyards: GRSE, Mazagon Docks Ltd (MDL), and Goa Shipyard Ltd (GSL).

While GRSE is racing ahead with its design centre JV, the giant Mazagon Docks Ltd (MDL) is also going ahead with its own JV, albeit more conservatively. MDL has short-listed four foreign shipyards and has hired ICRA as consultants to recommend a suitable JV partner and to help with the legalities of the JV. MDL does not plan to bring in a third IT partner as GRSE is doing.