Garden Reach Shipbuilders and Engineers (GRSE) has bagged an order of around Rs 650 crore for building three landing ship tanks (LSTs) for the Indian Navy.
The three ships, measuring 124 metre in length and 17 metre in width, would be inducted into the Navy for amphibious operation. The first ship is scheduled for launch from GRSE by June 2005.
However, the GRSE management greeted the news with cautious optimism. Rear Admiral R Paralikar, chairman and managing director, GRSE, said: "We have received the letter of intent (LoI) from the authority concerned but the final agreement can be signed only after the detailed negotiation involved are over. It would be a momentous occasion for the company, but let the order be sealed and signed first."
Paralikar said it would take at least another five months before actual production was initiated. "We are yet to place the order for steel," he added.
LSTs are designed to support amphibious operations, carrying equipment, cargo and troops. LSTs offload troops and supporting equipment by beaching the ship directly onto the beachhead. Indian Navy currently has two LSTs, Magar and Gharial, in its stable.
The order is a major break for the century-old GRSE, which has been starved of orders from the defence ministry in recent years. Although it has been clocking profits consistently, poor order book situation had posed a threat to the jobs of the nearly 7,500 strong workforce.
The LST order would stabilise the cash flow situation and ensure work for the next six to seven years.
However, GRSE would require to tighten its belt to make a decent profit out of the deal. Sources said GRSE was expecting no less than Rs 280 crore for each ship. But the order envisages a pricing of around Rs 215 crore per vessel.
Maintaining the deadline of mid-2005 would be another challenge for the company. In the past, failure to adhere to delivery schedules had been a major reason for orders drying up.
