India pulls strings to win Philippines warship order for state-owned yard

  • India’s GRSE seeks diplomatic intervention to bag Philippines warships order

  • GRSE’s bid rejected recently, despite being the best bid against 3 global shipyards

New Delhi: India is said to be looking at options, including a diplomatic intervention and government involvement to win an order from Philippines to meet its urgent need for two light frigates.

The warships order could be worth Rs. 2,150 crore for the Indian state-owned Garden Reach Shipbuilders and Engineers (GRSE).

The warships are required by Philippines urgently to patrol the South China Sea, the Economic Times reported today, without stating from where it got the information.

India’s defence ministry has urged the Indian diplomatic mission in Manila to get Philippines to rescind its earlier decision to keep out GRSE from the tender, the report said.

The Indian shipyard’s proposals had beat South Korea‘s Daewoo and Hyundai, apart from Spain‘s Navantia, both on technical and commercial grounds, it said.

Philippines is said to have decided to keep out GRSE from the tender, reportedly after the Indian shipyard could not satisfy the financial conditions.

Unlike the Indian system of procurement, where the navy or the coast guard release funds in tranches as warship construction progresses, the Philippines tender had structured its liabilities under a one-time payment format,, that too after delivery of the two light frigates to be ordered.

Another option being considered in India was for its government to stand guarantee for the funding of the warship construction by GRSE.

Philippines rated GRSE’s infrastructure and capability highly. However, the post-bids evaluation of GRSE led to Philippines to assess the shipyard to be financial incapable of getting the warship constructed at its own cost, the report suggested.

If GRSE succeeds in winning the Philippines tender, this could be its second warship related order in two years, after the successful delivery of a patrol vessel to Mauritius in December 2014.

Author: indostrat

IndoStrat is a media outfit that brings you news from the Indian defence and strategic sectors. If you are an avid watcher of India's military, diplomacy and strategic affairs, this is the place to come to for satiating your appetite for latest news, opinions, facts, tidbits and some informed gossip.

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