Aiming to plug loopholes in the joint ventures between defence and private sector shipyards, the Defence Ministry has prepared a draft policy on the issue, two months after it put a freeze on any such tie-ups.
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.
Sources revealed to Defencenow.com that as per the proposed new policy, Defence shipyards will not be allowed to share the contracts with the JV Company in cases where they have been nominated to build warships for the Navy or the Coast Guard.
As per the proposed policy guidelines, for all the tenders where the defence shipyards want to participate with the JV Company, they will have to go for a competitive bidding process, they revealed.
For sub-contracting the projects for which the defence shipyards are nominated by the Defence Ministry, they will not be allowed to award the tender to the JV Company without tendering process.
The draft policy has now been sent to the Commerce, Finance, Law and Justice and Corporate Affairs Ministries for their comments.
The ministry after receiving comments from all the stakeholders will prepare a final draft and send it to the Cabinet Committee on Security for its final approval.
The Defence Ministry had allowed its shipyards to form joint ventures in view of the large pending orders with them.
Defence Minister A K Antony had put on hold the tie up between MDL and Pipavav shipyards after ABG Shipyard and Larsen and Toubro (L&T) questioned the selection process and filed complaints with the Defence Ministry.