Pipavav and Mazagaon Dock to set up JV to build warships

Economic Times reported that Pipavav Defence and Offshore Engineering has been selected by Mazagon Dock as preferred partner for a joint venture that will look to build warships and submarines for Indian Navy.

Pipavav said in a statement to BSE that “The government of India has conveyed, vide its letter dated May 2, 2012, that Pipavav Defence and Offshore Engineering Co Ltd has been chosen as its partner for formation of joint venture to build warships for Indian Navy.”

The 50:50 joint venture named Mazagon Dock Pipavav will implement part of the existing orders of Mazagon Dock of INR 100,000 crore and also bid for future defence contracts in India.

The JV, which was earlier announced in September 2011, was put on hold by the ministry of defence due to allegations from Pipavav's rivals over selection policy. Immediately after the announcement of the deal, Pipavav's rivals, including the country's largest infrastructure company, L&T, and India's largest private shipyard, ABG Shipyard, had complained to the ministry about discrepancies in the selection process followed by Mazagon.

Mazagon Dock is India's biggest defence shipyard and accounts for more than 85% of the defence vessels built in the country.