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Interview-Part II

The first indigenously built Floating Dock (FDN-2) for the Indian Navy was launched on 20 June 2017 by Anjali Deshpande, wife of Vice Admiral DM Deshpande, Controller of Warship Production & Acquisition, at a ceremony at Larsen & Toubro Ltd (L&T) Shipyard at Kattupalli near Chennai

No problems in War ship building for the Indian industry

It is important to note that in the case of building warships requirement, there has been some advancement in Indian ship yards primarily because the Indian navy is taking lot of interest in equipment required for these ships. They have been able to achieve standards. But that sort of development has not taken place in the commercial sector even though they are technologically less challenging. This is an opportunity missed for the Indian shipping industry and even now I donít see that happening. The first disadvantage the Indian ship yards face is dependence on imports for equipment

The second problem the ship yards face is the need to mobilize skilled manpower and the recruitment system is not institutionalized. We donít have a method by which skill development required for ship building, training procedure and some certification are available to ship yards. The ship yards make their own training Program. The ship yards also try to get people with experience from abroad. It goes on this way.

The two important resources in ship building, seventy per cent of the cost of the ship is accounted for by equipment and machines and 10 to 12 per cent is man power. Indian labor may be cheap but skills are not adequate. So you have a problem here. Both the issues need to be addressed if our ship yards have to be competitive.

In the skill development program launched by the government recently they have included ship building as one of the 30 odd disciplines which should enable some movement in this front in the next two to three years. As for equipment manufacturing, I donít see much happening at this point of time. It will continue to struggle till such time the factors listed out are addressed and improved upon.

Overall commercial ship building in the country has the potential to meet the domestic requirements of the industry as well as the needs of non ship building nations in the neighborhood. India has however recently bagged an order for construction of specially designed off shore patrol boats for the Vietnamese border guards.

L and T shipyard forays into Commercial Ship Building before becoming a defense ship yard

L&Tís Kattupalli facility is in Tamil Nadu on Indiaís east coast, near Chennai. The facility holds a mega     shipyard for shipbuilding as well as retrofitting and conversions. 

As for Larsen and Toubro Ship Yard at Kattupalli near Chennai, the company nearly took three years to complete the infrastructure required for the ship yard. It is a joint venture company with the Tamil Nadu government. When we were ready to operate the ship yard, we decided to cater to the requirements of Navy and the Coastguard. When no defense orders were forthcoming till 2010-11, we decided not to allow the infrastructure we had built, to remain idle.

We decided that we might as well engage ourselves in commercial ship building. Initially for the first four or five years, we did some commercial ship-building. We faced some challenges in the initial years. Unfortunately these challenges of initial years when we were cutting teeth also coincided with the downward trend in the Shipping industry when oil prices fell leading to fall in demand for ships.

When we were finding it difficult to cope with the challenges of commercial ship building, the defense orders started trickling from 2015. So the management took the decision to build them from 2015 onwards. Later we took a policy decision that we will do only defense ship building. For the last three years we have emerged as a full-fledged defense ship building company, the defense ship building for the Indian Navy and the Coastguards.

Defense ship building is a structured program. It has got a very good formulated procedure. But it is badly running on time because ship yards engaged in defense ship building have run into difficulties in executing their work and completing the project on time. It is true to say that any project which does work according to time will run the risk of cost over-run,

Challenges of defense ship building

You have in Indian warship building the twin challenges of time and cost over runs and this happens in every Indian shipyard which has defense ship building programs primarily in public sector undertakings and in one or two private ship yards.

In Larsen and Toubro ship building, we were not affected by time delays. 
However in a majority, nearly 95 per cent of the war ship building programs are running behind schedule by a huge scale. I do not know why it should happen at all. The net result is that in majority of the ship building programs of the government are going behind schedule. They are not adequately planned and executed or for some technical reason or other. Every case has its own complications. The net result, therefore, is there are cost over runs.

Orders executed on time but no takers

We got Orders from the defense ministry for new ship building for 54 high speed interceptor crafts for the Indian Coastguards. We completed the project two years before schedule. We completed the entire orders but faced another problem. We built it too early for the customer to take possession of the crafts. The recipient, coastguards are faced with resource crunch.

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