Cdr Kinshuk De
IHQ MoD(N)/DSP
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Organisation & Infrastructure
Shipbuilding Experience
Product Profile
Details of Collaboration
Turnover and Financial Health
Personnel with Background
Orders Executed in last 05 years
Orders in Hand and Future Orders
Plans
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Production facilities and Process Control
Design Capability
Quality Control Procedures
Legal Issues
Capacity Assessment Committee scrutinises
Report of WOT with inputs of Domain experts
• Report approved by CWP&A
• RFP for Type of ships are thereafter issued
to Shipyards with valid and current Capacity
Assessment
• Validity is Two Years
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SHIPBUILDING
COUNTRY
MAJOR SHIPS
UNDER CONSTRUCTION
PERCENTAGE
Western Europe
Russia
USA
India
Turkey
South Korea
Poland
Portugal
Malaysia
Argentina
Japan
Denmark
Australia
China
Indonesia
Chile
Colombia
Iran
Thailand
109
40
33
22
20
9
7
6
5
5
4
3
3
2
2
2
2
1
1
39.5
14.5
12.0
8.0
7.2
3.3
2.5
2.2
1.8
1.8
1.4
1.1
1.1
0.7
0.7
0.7
0.7
0.4
0.4
S NO
CLASS OF SHIP
INDIAN YARDS
(a)
Aircraft Carrier
1
(b)
Destroyer
3
(c)
Frigate
3
(d)
Corvette
4
(e)
Offshore Patrol Vessel
4
(f)
Replenishment Tanker
(g)
Submarine
(h)
Fast Attack Craft/Extra Fast Attack
Vessels (FAC/XFAC)
(i)
Sail Training Ship
1
(j)
Survey
6
(k)
Landing Ship Tank (L)
4
6
10
62% vessels are delivered in good quality,
within the budget and on time. 27% of
vessels are delivered beyond one year after
delivery date.
•11% orders either get cancelled or land up
in arbitration
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Strengths
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Maturity of Defence.
Rise in private shipyards participation.
Strategic location.
No. 2 in trained manpower.
Low building cost.
Low cost of labour.
Opportunities
 Continual enhancement of Defence
budget outlay for Capital acquisition.
 Allowances of 26% FDI by Government
of India. Likely to be raised soon.
 Setting up of 1600 Km ship building
park.
 Overwhelming response exhibited by
industry & academia.
 Active participation by private industry
for development of products.
Weaknesses
Capital intensive
Economy of Scale
Insufficient level of indigenisation.
Lack of expertise to develop weapon
system.
 Dependence on foreign suppliers for
upgrades.
 limited capacity.
 Long gestation period in design and
construction.
Threats
 Delays arising out of long procurement
procedure.
 Time and cost overruns.
 Critical technology not transferred
through ToT.
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Private Sector participation will improve the
overall cost benefit, competition,
participation, sector development, widen
expertise etc
• Due diligence, risk assessment during the
decision making process
• Need for continuous assessment of the
shipyards for their capacity and competence
to deliver Naval Warships
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Private shipyards have defaulted to deliver
Yardcrafts and Survey vessels on time
primarily due poor financial health, error in
assessment of costs and shipyard capacity
• Issuance of RFPs may have been an error
due in-accurate assessment of financial
strength
• Limited Domain expertise within Navy to
look at Balance Sheets
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Shipyard’s ability to compete and stay in
business is greatly affected by its ability to
know what it costs to do business
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Need for rigorous financial
assessment as per checklists prior to
Capacity Assessment by Credit Rating
agencies with knowledge of present
market dynamics, risks, rating of
clients, management etc
• Process initiated
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Check Lists
• Financial assessment by Credit Rating
Agencies
• Reputation of management, Promoters, track
record and experience
• Assessment of production facilities,
production process, productivity,
• Logistics
• Current order book,
• Knowledge, innovation, product mix,
workforce
Check Lists
• Planning & design infrastructure
• Organization & HR practices
• Procurement procedures
• Subcontractors, quality assurance, safety,
health and environment
• Relationship with unions
Need for weighted consideration of factors in
Capacity Assessment with emphasis on
financial assessment for Risk Assessment to
ensure Quality Warships, Within Costs and on
Time for our Navy
Questions