(a) providing technical / R inputs. Further, the

(a)             
Underperforming Ancillary Industry. Ancillary
industries play a very vital role in warship building by providing machinery,
equipment and other miscellaneous items. The ancillary industry related to
Indian shipbuilding sector is neither developed nor matured as compared to other
leading global shipbuilding nations1. Today, most of the machinery
and equipment required inside a ship are imported, because they are cheaper and
are of very good quality. Critical equipment such as main engines, gear boxes,
shafting, propellers, generators etc., which are specific to warships are not
manufactured in India because of low volumes. Also, a large number of the
ancillary suppliers to shipyards are traders with little technical background.
With profits taking precedence over development, little effort is devoted towards
improving a product, incorporating technological advancements or even providing
technical / R&D inputs. Further, the
vendor base available in the country for supply of equipment, systems and
material is not very promising and only a few can be trusted to deliver
in time while ensuring quality.

 

(b)             
Lack of Skilled Work Force.        Availability
of skilled labour force is paramount for a competitive and self-sufficient
warship building industry. The same is evident from the fact that the total man
hours taken by the United States of America (US) to build the DD-651 class of Destroyers
(8315 tonnes) was only 5,000,000 hours whilst the Delhi class (6500 tonnes)
took 18,200,000 hours to build2. This is more than three
times the man hours required by the US. Further, the delivery period for FFG-7 (US)
was 30 months compared to the Delhi class which took 100 months.

 

(c)             
Inadequate Planning / Project Monitoring. Delays in shipbuilding are recognised at
later stages of construction. DPSUs do not identify the factors
contributing to slippage. The project management tools used are inadequate. Synergisation
does not happen with production units due to poor understanding of the overall
build plans. This problem further aggravates due to delayed decision on
freezing of SQRs, contract conclusion, timely receipt of approvals and delivery
of critical equipment from suppliers.

 

(d)             
Lack
of Design Capability in Shipyards.          IN has capability
to design complex warships and has successfully designed 19 classes of ships
from small crafts to destroyers. However, no modular design capability exists
with the design directorates of IN.
The private shipyards resort to buying the designs from foreign collaborators or
depend upon the IN for providing
design of warships on order. The shipyards also lack capabilities to undertake
detailed designs based on the master design.

 

(e)             
Lack
of Synergy Between Public and Private Yards.   One of the issues that concern India’s defence
shipbuilding is absence of synergy between public and private shipyards. Public
sector has long exposure to naval shipbuilding and the private yards have
greater flexibility and operational autonomy, in addition to the vast
infrastructure they have created in recent years. Greater synergy between both
would contribute to workload sharing between shipyards and thus, improved
efficiency.

 

(f)              
Commercial Practices.      As
DPSUs need to adhere to the L1 process of procurement of
material and systems, they do give less attention to quality and reliability.  The process associated with ordering even low
value items on a fast track hampers progress at every stage of shipbuilding. Use
of suitable management information software is essential for regular monitoring
of the status of order, for timely initiation of corrective measures and
identifying alternatives. Further, items need to be available just-in-time for
production or fitment on-board. At the same time, long storage periods in store
houses and re-preservation of equipment at repeated intervals are neither cost
effective nor desirable.

 

(g)             
Design
and Equipment Changes.         Long
construction time taken in conventional method of ship construction gives
flexibility in carrying out design modifications and change of major equipment
by IN, even after conclusion of
contract. This often leads to further increase in cost and delays and keeps the
shipyard and its infrastructure occupied for long period of time.

 

 

Global Shipbuilding Trends

 

1.           
India has a global shipbuilding share of approx.
1.3 %3 and ranks sixth when the
world shipbuilding output in terms of Compensated Gross Tonnage (CGT) is
considered. On the other hand, China, South Korea and Japan together account
for 85 % approx. of world shipbuilding output in terms of CGT. For some time,
Japan and Europe controlled 90 % of the market, but gradually Japan became the
dominant player in shipbuilding due to fast growth of the Japanese economy.
South Korea announced shipbuilding as a strategic industry and in combination
with low labour costs created the biggest shipbuilding industry in the world in
just 20 years. China caught the industrial expansion strategy and surpassed
Japan in 2006 and South Korea in 2009 (measured by order book volumes).

1 Krishnan S Navaneetha. “Prosperous
Nation Building Through Shipbuilding”. KW Publishers Pvt Ltd, New Delhi.2013.
pp 232-233.

 

2 Nath Rajeshwer. ‘Towards Modern Ship Design and Shipbuilding in India’,
Indian Defence Review, Jan-Mar 2005, Vol. 20 (1), pp 30-34. https://www.bharat-rakshak.com.

3 Krishnan S Navaneetha. “Prosperous
Nation Building Through Shipbuilding”. KW Publishers Pvt Ltd, New Delhi.2013.
pp 29.1.           
In terms of the build-period, Indian shipyards are almost four times more than the
international standards with substantial time and cost overruns between the
contractual milestones. The same has also been highlighted by CAG – “As
against the international timelines (for construction of a first ship of a
class) ranging from 66-84 months, the indigenous construction of P15 by MDL and
P16A by GRSE took 116 and 120 months respectively1”. The cost growth for
P15 is 315 %, for P16A is      684 %, for
P 17 is 260 %, for 15A is 226 % and P28 is 161 %2. CAG has concluded in
their audit report that the present shipbuilding capacity of these DPSUs based
on the past averages is close to four ships per year – a number too low to meet
the requirements of IN3.

 

2.           
Based on the aspects brought out at Para 6,
10 and 11 above, it is evident that Indian defence shipyards have severe
capacity constraints when compared to international shipyards, have huge time
and cost overruns and are not able to deliver the required number of warships
for the IN.

 

 

Methods to Overcome Capacity
Constraints

 

3.           
The leading global shipbuilding nations have
adopted various methods towards improving the productivity and minimising cost
and time overruns. These methods have resulted in meeting the shipbuilding
requirements in terms of capacity and capability. Some of the most important
methods / technologies adopted by these countries to improve the shipbuilding
efficiency are enumerated below:-

 

1 Performance Audit of Indigenous
Construction of Indian Naval Ships during 2005-2010. CAG. Report No. 32 of
2010-11. p 38.

 

2 Ibid. pp 16-18.

 

3 Ibid. p 58.