India’s Multi-billion Dollar Scorpene Sub Contract

Key appointments in India’s Navy. (July 29/11)

In 2005, India confirmed that it would buy 6 Franco-Spanish Scorpene diesel submarines, with an option for 6 more and extensive technology transfer agreements. The Scorpene deal had simmered on the back-burner for several years, before it became one of India’s largest-ever partnerships with France. DID reported that a deal was “close” as far back as 2004, but nothing was finalized until late 2005. The cost had been subject to varying estimates over the life of those multi-year negotiations, as well as project overruns; the final figure for the first 6 boats is now generally accepted as being about $4 billion.

India’s submarine fleet currently consists of 16 submarines, about 13 of which are operational. Its Foxtrot Class boats can no longer be counted on, and its U209 derivatives from HDW are unlikely to last beyond 2015. With Pakistan acquiring modern submarines, and Chinese submarine building exploding, serious thought to India’s future submarine fleet became an obvious priority. This DID FOCUS article covers the Scorpene deal and its structure, adds key contracts and new developments, and offers insights into the larger naval picture beyond India.

• The Deal: Plans & Costs
• The Deal: Contractors & Roles [updated]
• The Scorpene Class
• Scorpene Project: Contracts & Key Events [updated]
• Appendix A: India’s Current Submarine Force, and Rival Navies
• Appendix B: A Final, Nuclear Note
• Appendix C: Additional Readings & Sources [updated]

The Deal: Performance, Plans & Cost

The Scorpene project will kick off The Indian Navy’s long-term goal of acquiring indigenous capability in design, development and construction of submarines. The submarines will all be built in India, and expected delivery dates for the first six were set at 2012-2017. DCNS remained committed to those dates, until it had to bow to the obvious and begin promising 1st launch in 2013, and 1st delivery in 2015, with deliveries running from 2015-2020.

Most of the delays in that slippage are attributable to India’s slow decision making, and lack of readiness. Meanwhile, India’s existing fleet continues to age, and fleet size will become a serious concern by the 2nd half of the decade.

As noted at the outset, this deal has options for another 6 submarines, but that option has been replaced by a “Project 75i” competition for another 6. The Times of India adds that the long-term plan is to manufacture up to 24 submarines in a phased manner, and Admiral Prakash has confirmed that target and used the objective of “24 subs in 30 years.”

Time will tell if actual budgets and shipbuilding performance can match the Navy’s appetites. DID reminds our readers that long term plans for major capital acquisitions have a way of shrinking over time as budgetary tradeoffs are made – 32 DD (X) destroyers for the USA became 12, and then 3. Nevertheless, options and/or future schedule delays could easily keep submarine production for India going to 2030 or beyond, and the buildup of China’s forces in particular is likely to keep submarines high on India’s defense priority list.

Planned costs for the Project 75 deal had a range of reported figures, until a contract was signed. In the end, the figure was Rs 15,400 crore. That’s USD $3.5 billion converted equivalent at the time. Subsequent auditor reports indicated that the program would actually cost about 18,798 crore (about $4 billion), and escalation to 20,798 crore/ $4.38 billion has since been confirmed, which makes for about a 25% cost increase so far. Most of that increase is attributable to the Indian government’s own poor processes and delays.

The Deal: Contractors & History

A March 8/06 release from the Indian Ministry of Defence gives the long history of the contract. In 1997, the Government approved construction of 2 submarines at Mazagon Dock Ltd. Though the Requests For Proposals were sent to 4 firms (Thomson CSF of France, VSEL in the UK, Kockums of Sweden, and RVZ of Russia), only Thomson CSF responded. HDW in Germany had not been invited, as CBI was investigating certain allegations against the firm. Price negotiations were held with Thomson CSF, but in April 2001, the Government decided to conduct negotiations only for the indigenous construction of 6 Scorpene Submarines under Transfer of technology. Negotiations were held with the vendors and completed in 2002; the Ministry of Finance approved the Project in December 2002 and May 2003. The project was re-examined and negotiations were held with Vendors in 2005. This resulted in a reduction of INR 3.13 billion from the negotiated position in 2002, along with other concessions.

Contracts signed as of August 2009 total Rs 20,798 crore/ INR 207.98 billion. The contracts were signed at different times, and will be paid over different periods, so a true currency conversion is difficult. At August 2010 rates, that amount is around $4.38 billion. Contracts reportedly include:

• Rs 6,315 crore contract with DCNS’ predecessor for transfer of technology, combat systems and construction design.
• Rs 1,062 crore contract with MBDA for sea-skimming Exocet missiles and related systems
• Rs 5,888 crore contract with MDL for local submarine construction
• Rs 3,553 crore set aside for taxes
• Rs 2,160 crore for other project requirements
• Rs 2,000 crore added in March 2010 to cover added finalized costs of the “MDL procured material (MPM) packages”

India Comptroller and Auditor General reported that the government’s 9-year delay in finalizing the deal had probably raised the project’s cost by 2,838 crore, or about 15% of the project’s total cost – but that was before the additional Rs 2,000 crore payment was finalized.

The acquisition of the Scorpenes will enable India to reopen its submarine building assembly lines. The initial plan was for all 6 boats to be built entirely in India by Mumbai-based Mazagon Dock Ltd., whose submarine lines had been shut down since the finished the licensed manufacture of German HDW Type 209 diesel subs in 1994. By late 2010, however, delays led to reports that construction might be altered to include other shipyards, and even DCNS in France. That shift hasn’t happened for Project 75, but it is the plan for the follow-on Project 75i.

The key foreign contractors for the Project 75 Scorpene buy are DCNS and Thales, who will provide the “MDL procured material (MPM) packages” of propulsion, sensors weapons systems etc. that fit into the hull. Thales revealed that India’s Scorpene contract was worth nearly EUR 600 million (USD $736 million) to their company at the time, in return for key subsystems for the submarines’ 6 UDS International SUBTICS integrated combat systems, including underwater sensors, communications and optronics, and electronic warfare equipment. A corresponding DCN news release on the day of the 2006 contract signing put the total value to all members of the DCN Group at EUR 900 million. Those amounts have risen as finalized supplier contracts pushed upward by EUR 300 million, and the allocation has changed since Thales sold part of its naval business to DCN, in order to create DCNS. Some of these Thales products became part of the DCNS Group when the merger took place.

The French firm DCNS (Thomson CSF became Thales, which became the Armaris naval JV, then DCNS) will be the overall industrial prime contractor for this program, in partnership with Spanish naval shipbuilder Navantia. DCNS will also be in charge of the technology transfer and delivery of all services and equipment, and DCNS subsidiary UDS International will supply the combat systems.

A variety Indian subcontractors, such as Walchandnagar Industries, are also involved in the submarines’ construction, delivering specific parts for incorporation into the vessels.

Another contract signed between DCNS’ predecessor Armaris and MDL provides for a team of French technical advisers during the construction of the first 2 submarines.

The Scorpene Class

The SSK Scorpene non-nuclear submarine class has been jointly developed by DCN of France and Navantia of Spain, and incorporates advancements that stem from being developed about 10 years later than DCN’s Agosta 90 Class – which is currently being built in Pakistan with DCN’s assistance. Many of the Scorpene’s internal systems and weapons, however, are shared with the Improved Agosta 90B.

Displacing 1,565 metric tonnes, the standard CM-2000 Scorpene Class is 71.7m (219 feet) long with a submerged speed of over 20 knots, and submerged range at 100% battery usage and a speed of four knots of 134 hours or 536 miles. This new submarine class incorporates a high level of system redundancy to achieve an average 240 days at sea per year per submarine, and the endurance to undertake a 50 day patrol before being resupplied. In addition, its maximum diving depth is 300 meters (about 1,000 feet), giving the commander good tactical freedom for a conventional submarine.

The Scorpene’s SUBTICS combat management system, with up to six multifunction common consoles and a centrally situated tactical table, is co-located with the platform-control facilities. The vessel’s sonar suite includes a long-range passive cylindrical array, an intercept sonar, active sonar, distributed array, flank array, a high-resolution sonar for mine and obstacle avoidance and a towed array. Each Scorpene submarine features six 533mm bow located torpedo tubes with 18 weapons between torpedoes, mines (up to 30) and missiles.

India was leaning toward Finmeccanica’s Black Shark, the same heavyweight torpedo used in Chile’s Scorpene subs, but that decision has been put on hold by corruption allegations. Fortunately, a contract for the MBDA SM-39 Exocet was signed along with the original submarine contract. The Exocet SM 39 variant is launched from a submarine’s torpedo tubes, enclosed in a VSM (Vehicule Sous Marin). The VSM is a self-propelled and guided container that will maneuver before surfacing so as not to reveal the position of the submarine. Once in the air, the Exocet missile leaves the VSM and proceeds to the target like a normal surface variant of the missile. MBDA is jointly owned by BAE Systems (37.5%), EADS (37.5%) and Finmeccanica (25%)

In addition to these regular weapons, the Scorpene platform also offers advanced capabilities for mine warfare, intelligence gathering and special operations.

Scorpene subs can hold a total company of 31-36 men, with a standard watch team of 9. The control room and the living quarters are mounted on an elastically supported and acoustically isolated floating platform, really a ship within the ship.

Like many modern diesel-electric submarines, the Scorpene class is exceptionally quiet. It can also be equipped with an additional MESMA brand AIP (air-independent propulsion). A CM-2000 Scorpene can operate underwater for 4-6 days without surfacing or snorkeling to get oxygen to recharge its batteries. An AM-2000 Scorpene AIP, in contrast, will be able to operate underwater for up to 18 days depending on variables like speed, etc. Each AIP system costs around $50-60 million, as they require adding a new 8.3 meter (27 foot), 305 tonne hull section to the submarine. The resulting AM-2000 Scorpene AIP is 70m long and displaces 1,870t.

Naval Chief Admiral Arun Prakash has said that the agreement gives India the option of incorporating AIP technology after delivery of the 3rd submarines. India’s Navy appeared to be opting for this choice for Scorpenes 4-6, but has yet to make a firm decision. They are now talking about fielding only submarines 5 & 6 as AIP boats, alongside all of the 6 follow-on Project 75i submarines.

The India order brought the number of committed Scorpene submarine sales on the international market to 10. Scorpene orders worldwide are now at 14, and include Chile (2 O’Higgins class CM-2000 with split Navantia/DCN production, both delivered); Malaysia (2 with split Navantia/DCN production); and now India (6 from DCN-Armaris and local manufacture, 3 each CM-2000 and AM-2000 AIP, delivery expected 2015-2020). Brazil would later undertake its own project, which will include 4 SSK Scorpenes and 1 nuclear-powered SSN fast attack submarine.

India’s Scorpene Project: Contracts & Key Events

July 29/11: Rear Admiral MT Moraes takes over as the Assistant Chief of Naval Staff (Submarines) at Delhi, to look after the planning and acquisition of submarines.

Rear Admiral Srikant is also slated to take over as Flag Officer Submarines (FOSM) based at Visakhapatnam, this is the indian Navy’s class authority on submarines, responsible for defining standards, policies and procedures for their operations and maintenance. Rear Admiral G Ashok Kumar will take over as Flag Officer Sea Training (FOST) at Kochi. India MoD.

June 8/11: DCNS India Pvt. Ltd. signs an undisclosed contract with Flash Forge India Pvt. Ltd., an ISO 9001:2008 certified manufacturer of customized special material forgings based in Visakhapatnam.

This first contract with Flash Forge for the manufacturing of mechanical equipment is the conclusion of a long process for DCNS, which involved identification of potential partners, audits of the manufacturing and quality processes, qualification, and then a competitive Request For Proposal (RFP). With a lot of the advance work out of the way, DCNS expects to announce other local contracts in the near future. DCNS.

June 6/11: IANS relays a report in the May 2011 issue of India Strategic, which quotes DCNS India Managing Director Bernard Buisson to say that 2 Scorpene combat systems have been delivered to Mazagon Docks Ltd. (MDL), which is in the process of integrating the first one.

Buisson reportedly said that there are about 20 – 25 French engineers assisting in technology transfer, and added that DCNS has had technical discussions with the Indian Navy on installing MESMA air independent propulsion (AIP) systems on board the last 2 submarines. That move would raise the subs’ cost, and DCNS said they are (still) awaiting the Navy’s response. IANS | India Strategic.

May 18/11: The Times of India reports that 2 Indian naval crews will be going to France “after some months” to train for operating the SSK Scorpene fast attack submarines. The article notes that by 2020, India’s fleet will comprise just 5 Kilo Class and 4 U209 Shishumar class boats available, and quotes an unnamed official:

“We now hope to get the first Scorpene by August 2015. Each submarine will have just a 36-member crew since automation levels in them are very high,”.... “The first Scorpene will be ‘launched’ into water in 2013, and will be ready for commissioning by August 2015 after extensive harbour and sea trials,” said a top DCNS official. “The target is to deliver the sixth submarine by 2018, one every nine months after the first one in 2015. The third and fourth submarines are already under construction at MDL….”

April 6/11: The Scorpene project’s lateness, and uncertainties around Project 75I award and delivery dates, have led India’s Navy to talk with Germany’s HDW about upgrading and extending the capabilities of its existing U209 Shishumar Class boats, inducted from 1989-1994. Zee News.

Feb 16/11: Indian media quote Indian navy chief Admiral Nirmal Verma, who reiterates that the follow-on program to the Scorpene deal is already cleared by India’s government. The result could add 6 more Scorpenes to the order books, or it could result in a parallel program to build another model. With 7 of India’s 14 active submarines due for retirement by 2015, and the Scorpene program 3 years late because of self-inflicted delays, the Indian government’s unwise choice to avoid building any Project 75 Scorpene submarines in France has created a looming crisis for the Navy.

Verma says that the Navy is going through responses to the September 2009 RFI, and hopes to be able to issue a tender in 2011. Responses have reportedly included DCNS (Scorpene AIP), Germany’s HDW (U214) and its Swedish Kockums subsidiary (several options, incl. the forthcoming A26 design), Navantia (S-80), and Russia’s Rosoboronexport (Amur 1650), He adds that Project 75i is looking for an improved combat management system, better sensors and detection range, and the certain inclusion of Air Independent Propulsion (AIP) technology. Reports place the order total at $11 billion, but that seems high even if it includes both the current $4.38 billion for Project 75’s 6 subs, and a Project 75i program for another 6 diesel-electric boats. Time will tell.

The current plan is for India to order 2 submarines built at the winning foreign shipyard, and build 3 at Mazagon Docks Limited (MDL) in Mumbai, and 1 at Hindustan Shipyard in Visakaphatnam. That’s similar to the Project 75 plan pushed by India’s Navy, who wanted 2 boats built abroad because they feared that delays and performance issues might create problems for the Scorpene. Political favoritism overruled that request, and the feared scenario has come to pass. This time, the government is showing slightly more flexibility, by approving the plan to have 2 submarines built abroad in order to avoid a complete crash in fleet numbers. On the other hand, the Defence Acquisition Council (DAC) refused to accept the recommendation the Project 75i avoid MDL, due to that shipyard’s existing workload. Instead, the government assumes that it would be able to build 3 more submarines, which may even be of a different type, on an accelerated production schedule, while still delivering all 6 Project 75 Scorpene boats to the revised schedule. IANS | Times of India.

Jan 31/11: India’s Central Vigilance Commissioner has opened an inquiry into Project 75’s planned buy of 98 heavyweight torpedoes, after Atlas Elektronik GmbH executive director Kai Pelzer reportedly lodged a direct complaint. The complaint refers reportedly refers to irregularities in the conduct of the procurement process, including specific charges of corruption. The CVC inquiry was ordered in December 2010.

The inquiry suspends India’s planned buy of Black Shark heavyweight torpedoes from Finmeccanica subsidiary Whitehead Alenia Sistemi Subacquel (WASS), until this can be sorted out. Atlas Elektronik Gmbh was offering their DM2A4 Seahake. Both torpedoes feature advanced seeker heads, and can be controlled by a trailing fiber optic cable. Defense World | Economic Times of India.

Jan 18/11: India’s Economic Times sums up the latest revisions to India’s Defence Procurement Policy, amid hopes that the stranglehold of state-run firms on major Indian defense contracts might be loosened:

”...(DPP) 2011 has made it clear that the state-owned companies will get preference while awarding major defence contracts. Private sector will get certain concessions, but the situation has not gone down well with the players…. According to DPP 2011, foreign defence vendors can now discharge their offset obligations in the civil aviation, internal security and training sectors, compared to the earlier mandate of discharging the same in the defence industrial sector only…. The minister also brushed away concerns that the new policy guidelines related to the capital intensive shipbuilding industry favoured the defence PSUs, in spite of the demonstrated ability of private sector companies, such as Larsen and Toubro (L&T) and Pipavav Shipyard in recent years…. L&T, which has invested millions on its state-of-the-art shipbuilding facility at Hazira, was promised a critical role in developing and manufacturing India’s second submarine line, Project 75I, along with the state-owned PSU Mazagon Dock, but was later sidelined…. The new policy – which has divided procurement into two different sections – mandates that the DPSU shipyards will be given contracts on a nominated (non-competitive) basis, while the private shipyards will have to participate through a competitive bidding process. Further, it remains the government’s call to decide which contract should be open to competitive bids in the first place, raising questions of whether the government is queering the pitch further.”

Dec 2/10: The headline reads “After delays, Scorpene submarine now on track: Navy chief.” Unfortunately, the IANS article doesn’t offer many specifics to support that contention, so it’s hard to evaluate.

Nov 30/10: India’s PTI reports that Russia’s Rosoboronexport will offer the latest Amur-1650 class submarines to India for Project 75i, the follow-on tender for 6 new submarines that will either extend or complement the current Scorpene contract.

The Amur is known as the Lada class in Russia, and renaming it the “Amur” for export is probably a good idea, in case anyone still remembers the infamous Lada automobiles. The new class was developed by the Rubin Central Design Bureau of Naval Technology as an improvement to the Project 636 Advanced Kilo-class diesel-electric fast attack submarines, and is said to be even quieter. The 1,765t Amur 1650 variant is larger than the Amur 950 model, and has an option for air independent propulsion. It lacks the 950’s 10 vertical launch tubes, relying instead on 6 reloadable torpedo tubes.

Sept 29/10: An Asia Times article, “Leaks in India’s submarine strategy,” says that the submarine construction program has changed:

“India is in the process of getting six Scorpene subs… to be built at the Mazagon facility in Mumbai… but this procurement is experiencing a slowdown. Mazagon Docks in Mumbai will construct three of the six, Hindustan Shipyard Ltd in Visakhapatnam will construct one, and the other two may be procured from foreign sources or built by another private shipyard in India.

“The delivery of the first of the French Scorpenes, which was supposed to enter service in December 2012, has been delayed. Antony addressed this situation in parliament only a few weeks back. This will clearly impact upon India’s undersea force levels,” said [Observer Research Foundation senior fellow Dr. Rajeswar] Rajagopalan. “India has about 35 private shipyards, of which L&T [Larsen & Toubro Ltd] and Pipavav are believed to be competing to build the two submarines, of the six planned.”

The report adds that shrinkage of India’s operational submarine fleet may even force 2 submarines to DCNS shipyards, so they can be delivered and become operational in time.

March 10/10: DefenseWorld reports that the Indian government has approved another Rs 2,000 crore for the Project 75 Scorpene submarine program, to cover the purchase of contractor-supplied MPM equipment packages for the Project 75 Scorpene submarines.

Negotiations over the price increase have been stalled since October 2005, which has delayed the Project 75 program by 2 years.

Aug 29/09: The Times of India reports that the Defence Acquisitions Council has decided to approach the Cabinet Committee on Security to approve a EUR 300 million (about Rs 2,000 crore) cost spike for the French ‘MDL procured material (MPM) packages,’ from a EUR 400 in 2005 to EUR 700 million now. The MPM packages go inside the hulls being produced by Magazon Docks Ltd., and reportedly include virtually all major systems connected with sensors, propulsion, and other systems.

Contracts signed to date include the October 2005 Rs 6,315 crore contract with DCNS’ predecessor for transfer of technology, combat systems and construction design; the October 2005 Rs 1,062 crore contract with MBDA for sea-skimming Exocet missiles and related systems; a Rs 5,888 crore contract with MDL for local submarine construction; Rs 3,553 crore set aside for taxes; and Rs 2,160 crore for other project requirements. Total: Rs 18,798 crore. India Comptroller and Auditor General reports that the government’s 9-year delay in finalizing the deal has probably raised the project’s cost by 2,838 crore, or about 15% of the project’s total cost before this price rise.

April 26/10: Sify News quotes a Parliamentary response by defence minister Antony regarding the Scorpenes:

“A programme of construction of six Scorpene submarines is currently underway at Mazagon Docks Limited (MDL) under transfer of technology from a French company. As per the contract, the first submarine was scheduled to be delivered in December 2012 and thereafter one each every year till December 2017…. There has been a delay due to initial teething problems, absorption of technology and augmentation of MDL purchased material. The first submarine is now expected to be delivered in the second half of 2015…. The delay in scheduled delivery of submarines is likely to have an impact on the envisaged [submarine] force level…. However, the gap in submarine capacity has been addressed by modernisation with the state-of-the-art weapon and sensor fit on the existing submarines….”

See: Sify News | Indian MoD – less detailed.

March 30/10: An Indian PR Wire release by Walchandnagar Industries quotes DCNS Chairman Patrick Boissier, who was speaking after the unveiling of the “Vinod Doshi Technology Center”:

“Said that the company which was Europe’s leading company in , ship building , off shore patrol vessels and Submarine manufacturing and valued at Euros 2.5 billion had signed an MOU with WIL last year manufacturing of critical technical parts for Scorpene” submarines for the Indian Navy…. Walchandnagar Industries was identified for the project after we scouted for strategic partners and we were convinced that they would provide us the with High level technology for critical manufacturing components, he added “Talking about our future plans is premature , but it is possible in the long term to work with Walchandnagar Industry for world markets after our project in India is completed as we have a 30 % market share in Submarine manufacturing.”

While the release adds a piece to the industrial puzzle, careful reading of Mr. Boissier’s statement shows no commitment made.

Dec 2/09: The Indian government confirms earlier reports, via a written reply to a Parliamentary question:

“As per contract signed with Mazagaon Docks Limited (MDL), first Scorpene submarine is scheduled to be delivered in December 2012 and thereafter, one each every year till December 2017. On account of some teething problems, time taken in absorption of technology and delays in augmentation of industrial infrastructure and procurement of MDL purchased materials (MPM), slippage in the delivery schedule is expected. Delay in scheduled delivery of submarines is likely to have an impact on the envisaged submarine force levels [for the Navy as a whole]. Loss on account of the delayed delivery is difficult to quantify at this stage.

This information was given by Defence Minister Shri AK Antony in a written reply to Shri Prabhat Jha and Shri Prakash Javadekar in Rajya Sabha today.”

July 20-27/09: India’s Comptroller and Auditor General releases a report critical of the Scorpene acquisition, and Defense Minister A K Antony admits to India’s Parliament that the project is running about 2 years behind schedule, due to “some teething problems, absorption of technology, delays in augmentation of industrial infrastructure and procurement of MDL purchased materials (MPM).”

The CAG report criticizes the fact that the submarine requirement was approved in 1997, but no contract was signed until 2005, and then for only 6 of the envisioned 24 boats. Overall, the project cost had increased from Rs 12,609 crore in October 2002 to Rs 15,447 crore by October 2005 when the contract was signed. Once it was signed, the CAG believes that “the contractual provisions resulted in undue financial advantage to the vendor of a minimum of Rs 349 crore.”

The overall project, which includes a submarine construction facility at Mazagon Dockyards Ltd. (MDL), is placed at Rs 18,798 crore, or 187.98 billion rupees (currently about $4 billion). The Times of India believes that the final program cost will be over Rs 20,000 crore (currently about $4.3 billion), as the cost of key equipment that MDL shipyards needs is rising quickly. Rediff News notes other excerpts from the CAG report, adding that an accompanying Rs 1,062 crore deal for Exocet anti-ship missiles will have issues of its own:

“But even before the missiles becomes operational on the submarine, the warranty period of first two batches of the missiles supplied by the company would have expired, it added. India also extended to the [submarine] vendor “Wide ranging concessions” on warranty, performance bank guarantee, escalation formula, arbitration clause, liquidated damages, agency commission and performance parameters….”

See: Times of India | Rediff news

Jan 13/09: A CNN-IBN TV program highlights the case of the Kilo Class submarine INS Sindhukirti, whose repair schedule reportedly ran for 10 years, and which “has been in dry dock at Vizag for a refit programme for close to five years now.”

A confidential Indian CAG report is said to have found that only 7 of India’s 16 submarines are available for combat at any time. That’s not an unusual percentage for a submarine force, but if 10 of the 16 are due for phase-out by 2012, the impact on force levels is obvious. To maintain current numbers, one submarine would need to be inducted every 2 years, but there have been no additions since 2001. Source.

May 28/08: The Hindustan Times reports India’s navy may not be able to induct the first Scorpene submarine by the 2012 deadline, as the French have yet to part with crucial details including design and drawing documentation. “A senior navy official confirmed to HT on Tuesday that the project had been delayed by a year.”

The Scorpene project is not the only Indian naval project with delivery issues, and these situatons have begun to create combat power issues for India’s navy. The article states that by 2015, India’s fleet will have shrunk from 16 submarines to 10 Kilo Class plus the Scorpenes. See also subsequent Financial Express report.

Feb 28/08: “India Looking for Additional Submarines.” The RFP is reported to be worth about EUR 3 billion/ $4.5 billion, and responding firms are apparently Spain’s Navantia (S-80 confirmed), France’s DCNS (unknown, Scorpene or Marlin Class that’s under design), Russia’s Rubin (Improved Kilo), and Germany’s HDW (unknown, U212A or U214).

March 22/06: India’s MoD responds to Scorpene-related financial and security breach allegations:

“No contract or contracts were signed with French firms for Rs. 16,000 crore for the Scorpene project. The total cost of the two contracts signed with the two French firms, M/s ARMARIS and MBDA, for the project is Rs. 7,197 crores.

The Government did not pay an extra amount of Rs. 4,500 crore than what was negotiated earlier. On the contrary, after the present Government came to power, it re-examined the project even though all negotiations had been completed in 2002 and the Ministry of Finance had accorded approval to the project in 2003. The present Government held negotiations and was able to achieve a reduction of Rs. 313 crore in the contracts with the two French firms from the negotiated position in 2002…. As a result of the negotiations, the Government was also able to achieve several long-term concessions. These included the revision of the escalation formulae to the advantage of the Indian side by adjusting the fixed element in the ARMARIS contract and placing a cap on escalation in the MBDA contract. A cap was also placed on the Exchange Rate Variation (ERV) for calculation of profit for the Public Sector Undertaking, Mazagon Docks Limited (MDL).

Besides the contract with the two French firms, the only other contract that was signed was with the Defence Public Sector undertaking, Mazagon Docks Limited (MDL), for Rs. 5,888 crores for the indigenous construction of the submarines. Therefore, even taking into account the value of contract signed with MDL, the total value of all contracts signed for the Scorpene project is Rs. 13,085 crores out of the sanction accorded for Rs. 18,798 crores towards the project. Out of the balance amount of Rs. 5,713 crores, Rs. 3,553 crores is for payments towards taxes and Rs. 2,160 crores towards other items to be acquired during the project period for which only preliminary steps have been taken. No contract or contracts have been signed for the items under this head. A Technical Agreement was also signed between India and France to ensure the continued support of the French Government to the “project.

The Integrity Pacts signed to ensure transparency of the project, contain, severe penalties in case of breach of any of its provisions. The safeguards include cancellation of the contract, recovery of all advances with interest at a rate of 2% higher than the European Inter Bank Offered Rate or EURIBOR, non-payment by the buyer of any dues on any other contract to make such recoveries, imposition of Liquidated Damages and the recovery of all sums paid to any middleman or agent…. The French company that has been accused of committing to pay commission to the alleged middleman has denied all the allegations and has stated that all the e-mails published in the articles in a journal that carried this story are fake and fabricated…. The French company has since been reported to have filed a case in the Delhi High Court on 24th February 2006 against the journal which first made the allegations.

....Some press reports also sought to establish a link between the Scorpene project and the breach of security that had occurred in the Directorate of Naval Operations in the Naval Head Quarters…. However, the leaked information did not pertain to the Scorpene project.”

March 1/06: “India Looks to Modify Scorpene Subs With MESMA AIP Propulsion.” Submarines 4-6 will include the MESMA system. Article includes information about competing AIP systems.

Oct 7/05: DID – India Signs $3.5B Scorpene Sub Deal (updated)

Appendix A: India’s Current Submarine Force, and Rival Navies

India’s two most prominent competitors are Pakistan and China.

Pakistan currently owns 8 submarines. They acquired 4 French Daphne submarines (Hangor Class) and 2 French Agosta 70 submarines (Hashmat Class) from the French Navy during the 1970s, and modified the submarines to fire Harpoon missiles in 1985. Two updated Agosta 90Bs (Khalid Class) are also in service, and were commissioned in 1999 and 2003 respectively. The third submarine will add a MESMA AIP, and the other two Agosta 90Bs may be refitted for the propulasion system later.

Two of Pakistan’s Hangor Class are due for decommissioning soon, and the age of the Daphnes and Agosta-70s will make maintaining their current submarine force level a challenge.

China currently owns 74 submarines; 33 of them are Type 033s, a Chinese copy of the 1960s-era Romeo class (which in turn was based on 1944 U-Boat designs). None of those are expected to remain in service past 2010, but projections indicate that by the time India’s Scorpenes begin to enter service, the Chinese will probably have 58-61 submarines.

If one leaves out the problem-plagued Type 091 Han Class SSNs and old, updated-Romeo Type 035 Ming Class SSKs entirely, China’s attack sub force is still projected at about 30 subs by 2010, including 4 Type 093 Shang Class SSN and 8 Kilo (Project 636) & Advanced Kilo Class (Project 877) SSKs.

The submariner blog Ultraquiet No More points out that India currently operates 14 submarines. Based on additional research, DID has revised that total to 16 submarines, of which 9-13 are currently operational:

• 4 German Type 209 SSK submarines, known in India as the Shishumar Class. They were delivered between 1984 – 1994; S44 Shishumar has been refitted, and one submarine (probably S47 Shankul) is currently undergoing a refit. The vessels are expected to reach their end of service life between 2016-2024.
  
  The United News of India (UNI) reported on Sept 6/04 that Siemens of Germany has offered the Indian Navy an upgrade for the Shishumar Class submarines, which will involve the installation of their Air Independent Propulsion (AIP) system. India is said to be cautious about the technology, and especially the dangers of storing hydrogen on shore.

• 10 Russian Kilo Class/ Project 877 SSKs, known in India as Sindhu Class and built (1986-1991, 1997, 2000) under a contract between Rosvooruzhenie and the Indian Defense Ministry. They are considered to be one of the world’s quietest submarines, but there are reports that the Indian Navy considers them underpowered. Several of these subs have received mid-life refits, but the quality of those refits has been a subject of dispute. Based on the timing of mid-life refits and statements by India’s Navy, it seems likely that India’s Kilos will begin reaching the end of their service lives and entering rolling decommissioning around 2012. Even so, the spacing of their original delivery ensures that they will remain in service for many years to come.

• Bharat-Rakshak adds that 2 Foxtrot class subs delivered in the mid-1970s are still technically in service. S40 Vela is said to be undergoing a refit of some kind, which may or may not ever be completed. S42 Vagli is based in Mumbai, and is unlikely to remain in service for very much longer.

Appendix B: A Final, Nuclear Note

PTI quotes Indian Defence ministry officials as saying that after the first two submarines are delivered, the Mazagoan docks would be at full liberty to change the shape of the Scorpene boats to provide for installation of “more lethal weapons, including missiles.” Israel’s sea-launched, medium-long range cruise missiles would certainly fit that bill, and could also have the heft to carry nuclear weapons.

India also has its ATV (advanced technology vessel) program to build a nuclear-powered submarine. According to GlobalSecurity.org, the ATV program began in 1974 and became a serious effort in 1985, including the reported lease of a Russian Charlie-I Class SSGN in 1988 for evaluation and training purposes. Arihant was launched in 2009, and this technology demonstrator includes the ability to launch India’s K-15 Sagarika medium range nuclear ballistic missiles.

See “India’s ATV SSN Submarine Project” for further details.

Appendix C: Additional Readings & Sources

Submarines and Platforms

• Naval-Technology.com – Scorpene Class SSK

• Deagel.com – Scorpene Basic, or CM-2000 | Scorpene-AIP , or AM-2000 | Scorpene Compact-AIP

• Rediff.com (Sept. 12/05) – What is the Scorpene?

• GlobalSecurity.org – Project 75/Scorpene

• Bharat-Rakshak – Shishumar {Type 209} Class

• Bharat-Rakshak – Sindhugosh {Kilo} Class

• Bharat-Rakshak – Foxtrot Class

• Wikipedia – Exocet missile

• DID FOCUS – India’s ATV SSN Submarine Project

• GlobalSecurity.org – Advanced Technology Vessel (ATV)

• DCN – MESMA AIP

• Undersea Warfare Magazine (Fall 2001) – Air Independent Propulsion: AIP Technology Creates a New Undersea Threat. Very good overview of various AIP technologies.
• Navy League of the United States, Seapower Magazine (December 1999) – The AIP Alternative

Additional Readings: News and Events

• Rediff News – Scorpene project archive

• India Strategic (May 2011) – Indian Navy’s second Submarine Line will witness strong competition. Discusses the decline of India’s subamrine force, and Project 75i.

• Asia Times (Sept 29/10) – Leaks in India’s submarine strategy

• BBC (Oct 23/09) – Crucial Indian defence deals delayed. These include the Navy’s submarine and aircraft carrier projects, advanced trainers for the air force, and coastal surveillance plans. “For its part, the government has been slow in responding to criticism – even from its auditing organisation. When it comes to defence issues in India, speed does not seem to be of paramount importance.”

• CNN-IBN (Jan 13/09) – Are We Battle Ready: Submarine repair that takes forever. Describes an overhaul of INS Sindhukirti, one of the Navy’s Kilo Class subs. It has been drydocked for 5 years, and the reapirs at Hindustan shipyards, which has no experience in this area, are expected to take a total of 10 years instead of the 1-2 years that would be expected elsewhere.

• IBN Live (Oct 25/08) – Indian Navy’s submarine fleet in poor health: CAG. “The Comptroller and Auditor General (CAG).... states that no more than 48 per cent of India’s submarine fleet is available for waging war, should India be attacked…. “The Indian Navy currently hold just 67 per cent of the force level envisaged in its 1985 plan,” the report says.”

• India Defence (Oct 19/08) – Indian Navy Project-75A: RFIs Issued for Six Advanced Submarines; Rosoboronexport, Armaris, HDW in the Fray. These would be a follow-on to the original Scorpene purchase. AIPs and land-atack capability are both requirements.

• Rediff News/PTI (Oct 7/05) – India signs Scorpene submarine deal

• The Indian Express (Oct. 7/05) – Scorpene Deal Inked in Delhi

• Times of India (Sept. 13/05) – Scorpene Ahoy! Also contains a paragraph concerning India’s intention of building a nuclear submarine.

• DCN Release re: India (Sept. 13/05) – New Success for Scorpene

• Rediff.com (Sept 12/05) – India to Buy 6 Scorpene Submarines

• Times of India (Sept. 12/05) – Scorpene: India’s Latest Weapon

• Thales Release (Sept. 12/05) – Success for Thales in India on Scorpene Submarine Programme

• DCN Release re: Chilean Navy (Sept. 12/05) – DCN Delivers First New-Generation Submarine to Chilean Navy

• The Tribune of Chandrigarh (Aug 11/05) – Admiral Arun Prakash: Scorpene Deal Awaits Cabinet Nod. Good set of additional naval updates in this article. Note that the Scorpene deal discussed here of 2 buy, 4 build is different than the deal being reported now.

• DID (Dec 14/04) – India Close to Deal on Scorpene Sub Technology. Maybe depending on what the meaning of “close” is…

Additional Readings: Rival Navies

• Naval-Technology.com – Agosta 90B SSK

• Official Pakistani Navy Site – Submarines (Hashmat Class, ex French Agosta 70)

• GlobalSecurity.org – Hangor Class (Fr. Daphne)

• Pakistani Post Office – A History of Submarine Construction in Pakistan

• GlobalSecurity.org – China/ Ships