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Defence Ministry drafts policy on JVs for warship manufacture

NEW DELHI (PTI): The Defence Ministry has prepared a draft policy on joint ventures between government and private shipyards for manufacturing warships, two months after it put on hold any such tie-up.

The new policy will aim to plug all possible loopholes in any joint ventures between government and private sector shipyards for manufacturing warships.

The Ministry had put on hold any such joint venture after receiving complaints against a JV between Mazagon Dockyards and Pipavav Shipyards to build naval ships.

"We have prepared the draft policy for such joint ventures and have sent it to the Commerce, Finance, Law and Justice and Corporate Affairs Ministries for comments," a Defence Ministry official said here.

"After receiving the comments, we will make the required changes and then send it to the Cabinet Committee on Security (CCS) for final clearance from the Government," he said.

After putting on hold the joint ventures, Defence Minister A K Antony had said that as a public sector entity, MDL was nominated for several important projects and it cannot give those contracts to the JV with Pipavav.

"They can't give (those projects) to the JV. For that, the JV should compete. Otherwise that will be exploitation," he had said.

The Defence Ministry had allowed the shipyards to form joint ventures in view of the large pending orders with them.

"All the shipyards have full orders. They would have taken several years to complete them. In the present security scenario, we cannot wait for that long so we allowed joint ventures," the Minister had said.

Antony had put on hold the tie up after ABG Shipyard and Larsen and Toubro (L&T) questioned the selection process and filed complaints with the Defence Ministry.


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