L&T Faces Setback: Loses Rs 70,000 Crore Submarine Deal Post CEO's Controversial Workweek Remark
Larsen & Toubro (L&T) has suffered a major setback after the Ministry of Defence rejected its bid for a Rs 70,000 crore contract under the Indian Navy’s Project 75 India. The project involved building six advanced submarines but was denied due to non-compliance with crucial tender specifications. This comes amid controversy following the CEO's contentious statement advocating a 90-hour workweek.
Why Was the Bid Rejected?
The tender mandated the inclusion of a sea-proven Air Independent Propulsion (AIP) system, an essential technology for extending submarine endurance underwater. Unfortunately, L&T and its Spanish partner Navantia failed to meet this requirement. Although they showcased their AIP technology to the Indian Navy in Spain, it was tested in a controlled environment onshore rather than the required at-sea demonstration.
As a result, Mazagon Dock Shipbuilders Limited (MDL) and Germany’s ThyssenKrupp Marine Systems remain the only eligible contenders for the highly lucrative submarine project.
Implications for L&T
The loss of this contract has significant implications for L&T, which had partnered with Navantia to develop submarines capable of remaining submerged for up to three weeks. Missing out on this critical project not only highlights the importance of meeting stringent defense procurement criteria but also affects L&T's reputation and future defense prospects.
Conclusion
This setback serves as a reminder of the high stakes involved in defense contracts, where adherence to precise requirements is paramount. For L&T, the focus now will be on recovering from this loss and strengthening future bids by ensuring compliance with all technical specifications.
