Hindustan Shipyard Ltd has won a contract to build two diving support vessels (DSV) for the Indian Navy, chairman and managing director of HSL, Rear Admiral (Retd) LV Sarath Babu said on Monday.
Talking to TOI, Admiral Sarath Babu said each of the DSVs would cost Rs 1,000 crore. The DSV is used by the Indian Navy to help in emergencies like a submarine sinking, or to provide material to submarines. He said HSL had won the contract through a competitive bidding process.
“We have completed the price negotiations, and expect to sign the work contract soon,” Admiral Sarath Babu said.
The first DSV would be delivered within three years of getting the contract, and the second one will be due for delivery within 12 months of the delivery of the first vessel.
Asked whether HSL had the capabilities to build the specialised vessels, the HSL chairman said the shipyard, which was set up in 1941, had the wherewithal in terms of technology and manpower to design, construct and deliver the vessels to the Indian Navy on time.
“For highly specialised technology and labour, we will bring in outside consultants for the purpose, but we will deliver the vessels to the Indian Navy’s satisfaction and also on time,” Admiral Sarath Babu said.
The Navy contract has come at the right time for HSL, which is struggling to stay afloat as orders for ships dried up several years ago forcing it to depend mainly on ship repairing works to stay in business.
The retired rear admiral said apart from the DSV contract, HSL was also being considered to repair an Indian Navy submarine. “The repair work is for medium-term retrofit and life certification. As part of the contract, we will increase the life span of the submarine’s service by seven years,” he said.
The submarine retrofit contract is expected to last for at least three years. HSL is expected to get the contract in early 2018. “HSL will now have enough work for the next few years. The only major issue we have to handle is the legacy issue of the company’s losses,” he said. The company had appealed to the Union government for a financial restructuring package.
If the government approves the restructuring, HSL’s negative net worth of Rs 750.51 crore would be erased from its books. In FY 2016-17, HSL posted revenues of Rs 650.08 crore with an operational profit of Rs 38 crore. Operational profit of a company is the profit before interest and taxes.
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