Wednesday, 26 January, 2022
HomeDefenceSwedish major SAAB pulls out of P75I race, cites 'unbalance' in strategic...

Swedish major SAAB pulls out of P75I race, cites ‘unbalance’ in strategic partnership policy

SAAB official says they are concerned about the Indian side having full control in the strategic partnership model. South Korean company joins race P75I now.

Text Size:

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initiative to build six conventional submarines under Project 75 India (P-75I), Swedish defence major SAAB has withdrawn from the project saying there has to be a rethinking on the policy.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.


Also read: Arsenal for Pakistan prepped, Army now focuses on ammo reserves to deal with China


 

Subscribe to our channels on YouTube & Telegram

Why news media is in crisis & How you can fix it

India needs free, fair, non-hyphenated and questioning journalism even more as it faces multiple crises.

But the news media is in a crisis of its own. There have been brutal layoffs and pay-cuts. The best of journalism is shrinking, yielding to crude prime-time spectacle.

ThePrint has the finest young reporters, columnists and editors working for it. Sustaining journalism of this quality needs smart and thinking people like you to pay for it. Whether you live in India or overseas, you can do it here.

Support Our Journalism

6 COMMENTS

  1. India’s orange turban army also known is the pumpkin head force is one of the most feared forces….specially during Halloween season.

  2. I see the same fate for MMRCA 2.0, where companies will eventually pull out due to confused and greedy policies. Heck, the forces are the one who suffers.

  3. The MoD/ Indian Navy couldn’t have found a better partner to build submarines under P75I.
    The South Korean Board of Audit and Inspection found 1.5 trillion won (approximately US$1.27 billion) of accounting fraud in Daewoo Shipbuilding and Marine Engineering’s books on June 15, 2016. It was given a 2.9 trillion won (US$2.6 billion) government loan in March 2017 to prevent bankruptcy.
    In 2017, it was uncovered that North Korea may have hacked the company and stole company’s blueprints in April 2016. If North Korea has it, its as good as China having it. Why don’t we just place the order with China for the 6 conventional submarines??

  4. By 1999, Daewoo — the parent of Daewoo Shipbuilding and Marine Engineering went bankrupt, with debts of about US$ 80 billion. Soon after, South Korean prosecutors filed chargers against over 40 top executives, in what BBC described as the Daewoo corruption scandal.
    The Company’s auditors had concealed bribe payments of about 470 million won (close to US$400 million). Loss from bribery and corruption has been estimated to over US$1 billion.
    Daewoo Chairman Kim Woo-Jung fled to Vietnam. In December 2007, Kim was granted amnesty by President Roh Moo-hyun.
    In Daewoo, the MoD/Indian Navy have made an EXCELLENT CHOICE. The bribes could flow in even without asking. Bribery is in the Daewoo DNA.

  5. SAAB may be the only firm which has a functional AIP system, that is being supplied to other submarines also. But here the main focus is in ensuring that either Adani or Ambani gets the contract. All other consideration are secondary.

  6. SAAB flagging their concerns to MoD won’t help one bit. The terms are specifically drawn up, so that the ₹45,000 crore for building 6 submarines falls into the lap of crony capitalists.

Comments are closed.

Most Popular

×