New Delhi: In a setback to the ambitious strategic partnership initiative to build six conventional submarines under Project 75 India (P-75I), Swedish defence major SAAB has withdrawn from the project saying there has to be a rethinking on the policy.
“It is a decision we have made due to the customers’ requirements regarding the time schedule and requirements related to the SP (strategic partnership) policy with its unbalance between our possibilities to have control and our obligations and liabilities,” Ola Rignell, chairman and managing director of SAAB India, said in an interview to ThePrint.
“We believe that we have a very competitive product that would suit the customer well, but after having thoroughly examined the EoI (expression of interest), we have decided not to enter the competition due to the above reasons,” Rignell added.
He also said the SP model designed as of today is giving the Indian side full control and this is something they are concerned about.
“It is difficult for us to be a submarine supplier and not have control over the project,” he further said. Rignell added that both responsibility and liability should lie with the Original Equipment Manufacturer (OEM).
SAAB had flagged concerns to MoD
The SAAB chairman said while the firm has responded to the Request for Information (RFI), they had in their multiple meetings with the Navy and the Ministry of Defence flagged their concerns too.
Defence sources also confirmed that foreign OEMs have raised concerns about the SP model, not limited to submarines alone. Under the SP policy, an Indian vendor will hold 51 per cent stake in the project, thus taking away control of the special purpose vehicle (SPV) that is to be formed with the foreign OEM.
The OEMs, on their part, have said it makes them liable for any malfunction and they cannot guarantee quality products and also abide by the timelines as sought by the government. Rignell said that SAAB was offering the Indian Navy A26 submarines, which are currently being built for the Swedish Navy.
Under the P75I initiative, the six conventional submarines will be equipped with Air Independent Propulsion Systems (AIP).
“Remember that SAAB is the only firm which has a functional AIP system that is being supplied to other submarines also. Moreover, we have the technology to cut an existing conventional submarine, add another compartment with AIP and fix it all back together which will allow older submarines to stay underwater for longer duration,” Rignell added.
When told that Russia is pushing for a government-to-government contract with India to build submarines, Rignell said SAAB cannot comment on it but added that the Indian government can talk with its Swedish counterpart for the same if that is what is being thought of.
He also said the Swedish government has, in the past, entered into similar contract with foreign governments for defence products — including the Gripen fighters.
South Korean company joins race for P75I
Even as SAAB has stepped out, South Korean company Daewoo Shipbuilding and Marine Engineering has been extended a late invitation by the Indian Navy to present technical bids for the contract last month.
The development came before Defence Minister Rajnath Singh’s visit to Seoul earlier this month.
The South Korean firm now joins the Naval Group (France), TKMS (Germany), Rosoboronexport (Russia) and Navantia (Spain) as potential foreign partners for the project.