Monday, 26 February 2018

Navy agrees to buy four Russian frigates for $3 billion

This will be the first capital warship contract since Project 17A was signed in early 2015 (above: INS Teg)

By Ajai Shukla
Business Standard, 26th Feb 18

New Delhi and Moscow have finalised contractual terms for four new stealth frigates that Russia will supply the Indian Navy for slightly over Rs 20,000 crore ($3 billion), or about Rs 5,000 crore ($775 million) per vessel.

Designated the “Upgraded Krivak III-class”, the first two frigates will be built in Yantar Shipyard, in Kaliningrad, Russia. The following two will be built in Goa Shipyard Ltd (GSL) with technology and designs transferred by Yantar. Delivery will begin within four years of signing the contract.

With a defence ministry “cost negotiation committee” having hammered out terms, it remains for the finance ministry and the cabinet to clear what will be the first capital warship contract signed since Project 17A was contracted in early-2015.

The navy already operates six Krivak III frigates. The first three joined the fleet between June 2003 and April 2004, followed by another three between April 2012 and June 2013. With the current contract, the navy will operate ten Krivak III frigates – the fleet’s largest single type.

The Krivak III costs marginally less than the Rs 5,750 crore ($888 million) that the navy will pay for each of seven indigenous frigates that Mazagon Dock Ltd, Mumbai (MDL) and Garden Reach Shipbuilders and Engineers, Kolkata (GRSE) have been contracted to build under Project 17A.

However, tonne-for-tonne, the indigenous frigates are cheaper. Each displaces about 5,600 tonnes fully loaded, significantly more muscular than the 4,000-tonne Krivak III. Further, each Project 17A frigate has space for two multi-role helicopters, while the smaller Krivak III embarks just a single Kamov-31 chopper. An extra helicopter provides major advantages in anti-submarine operations and airborne early warning.

Even so, with MDL, GRSE and GSL already stretched to capacity, navy planners are satisfied that Yantar is meeting India’s urgent need for more capital warships. The navy is also pleased with how the Krivak III fleet has performed over time.

New Delhi wanted to build all four Krivak III frigates in GSL under “Make in India”. However, Yantar had already part-built two frigates for the Russian Navy, which then backed away for lack of funds. New Delhi has obliged Moscow by buying them.

The part-built frigates at Yantar are also stalled by a defence embargo that Ukraine imposed on Russia after the latter annexed the Crimea. New Delhi, which has close defence relations with Ukraine, has undertaken to procure and provide Yantar the Zorya turbines that will power them.

The agreed terms stipulate a certain level of Indian-isation for the first two vessels that Yantar will deliver, and a significantly higher level for the next two vessels that are to be built in Goa.

For GSL, building a vessel as complex as a frigate will require upgrading its facilities and skills. However, naval planners say GSL should not take long to learn, having recently undergone the experience of building missile corvettes that are similarly dense in weapons and sensors.

These new Krivak III frigates will have the same engines and armament configuration as Yantar’s last three frigates – INS Teg, Tarkash and Trikand. These include the vaunted BrahMos anti-ship and land attack missile.

Senior naval planners underline the advantages of negotiating a “follow-on” contract, i.e. for vessels similar to those procured earlier. While it took six months to negotiate the contract for the Teg, Tarkash and Trikand, negotiations for the current contract took just 45 days to negotiate and finalise.

The navy’s medium term plans envisage increasing warship strength from the current 140-odd, to 198 warships by 2027. This will require adding 5-6 warships annually.

While some 75 vessels of various types are in the navy’s procurement pipeline, there remains a worrying shortfall of frigates, which are the navy’s workhorses. “We need to have at least 24 frigates. Currently we are ten short”, says a senior admiral.

9 comments:

Anonymous said...

There are better ways to spend money to ensure our maritime security than ordering Frigates.
It could have been possible to deny China a port situated on an important shipping lane for the price tag of less than these Frigates.
We are all aware that China Merchants Port Holdings, signed a deal with the Sri Lanka Ports Authority for a 70 percent stake in the Hambantota port. The deal, valued at $1.1 billion, was necessary to chip away Lankan debt. There is speculation that if India had stepped in with an outright grant of half the amount $600 million, China would not have obtained control of the port.
Similarly there are several projects which India promised Nepal which were stalled by India, Example: the year after year of the promise of a Police academy (now built by China) had become a joke, so were the promise of a road infrastructure and other development commitments made by India to Nepal, which never materialised.
In Bhutan there is ill feeling about the price India has negotiated for electricity from Bhutan’s hydro electric projects, even if India gave loans for these.
Our neighbour Bangladesh is currently facing a 400 million refugee inflow but India has been less than generous about sending funds. It is shocking than India has not stepped in with adequate humanitarian help, considering the enormity of the crises Bangladesh faces.
My point is that ensuring the goodwill of our neighbourhood, so important for our security, could have gone a long way if given the money being spent on these frigates.
Ironical that our Navy makes grandiose plans for a presence at the straits of Malacca when the Chinese war ships will soon be at our doorstep dominating the Gulf shipping lanes at Hambantota.

Anonymous said...

Thank god, some modernisation is moving. The good thing is it is a follow on order with more firepower. The training costs will boe lower.
Now we need to make similar deals for mine sweepers, medium anti sub helicopters and Subs.
Get them inducted quickly

Anonymous said...

With a defence ministry “cost negotiation committee” having hammered out terms, it remains for the finance ministry and the cabinet to clear what will be the first capital warship contract signed since Project 17A was contracted in early-2015.
Will wait for an official announcement from the GoI to believe it; when it comes to Russia these days, things tend to not happen more often than they happen! Hoever, if the purchase indeed goes through, this'll the first 'platform' buy from Russia since 2012 (last batch of Su-30 MKI).

However, tonne-for-tonne, the indigenous frigates are cheaper.
That does beg questions about this buy. Indian sipyard backlog simply does not cut ice; growing Chinese Naval threat is a flimsy reason to accelerate purchases and that too from China's strategic ally, Russia!

New Delhi wanted to build all four Krivak III frigates in GSL under “Make in India”. However, Yantar had already part-built two frigates for the Russian Navy, which then backed away for lack of funds. New Delhi has obliged Moscow by buying them.
That is very lazy journalism, Ajai. Nobody obliges anyone in geopolitics. If not you, someone else or some event will surely shed light on the real drivers behind this deal.

Anonymous said...

I think these are two different issues. How does one explain India hosting more than 25 million Bangladeshi citizens on its soil. Should Bangladesh be unhappy about that.vor for that matter, millions of Nepalis. If distributing money to neighbours would ward off adversaries than the world would be a different place. That is also worthy of consideration but defence capability, that takes decades to build, is absolutely necessary for country's security.

Anonymous said...

NSR says -

Does the total price includes the cost of two helicopters for each ship?
Any Indian hardware or software going into these ships?
Thank you.

Anonymous said...

Now we need to close 6 follow on Scorpene submarines with AIP so that the Indian Navy submarine deficiency is taken care of. With the last 3 set to be delivered in the next 18 months, time is running out.

The HDW chapter where the MDL line was allowed to lie idle and all the acquired skills were lost should not be repeated.

Anonymous said...

Thank you for publishing my comment.
I said that “Bangladesh faced an inflow of 400 million refugees”
This off course should be 400 thousand refugees.

Unknown said...

Sir you seem so logical. please identity yourself. Nikhil agarwal. nikhilag4u@gmail.com

Anonymous said...

we have been taken for a ride by the russians. don't understand how the price more than doubled from the previous lot India bought? we have succumbed to their pressure tactic and are forced to cough up so that we get another Akula class SSN. why did we not think of expanding order of P17A? at 3 Bil we could have got 3 more frigates built in our yards.
more important is we need S400 and Ka226T from them rather than these vessels. and whatever little capital budget was increased will be used for these orders....