February 5, 2018:
After 14 years of negotiations South Korea shipbuilder Kangnam has given up on working out a deal with India to build 24 badly needed MCMV (mine countermeasures vessels). Actually there were two efforts to negotiate a deal. The first one was delayed mainly by the anti-corruption measures India created to reduce misconduct in its procurement bureaucracy. But in many cases these measures are used to delay procurement decisions until those complaining (often a member of parliament) gets something in return. Not cash, of course, as that would be corruption, but something technically legal (like a future favor). To get needed purchases made the government has to tolerate these forms of legal corruption. As a result the quite lengthy delays continue. This killed the original deal in 2014 at which point India, desperate to obtain modern MCMVs offered a different arrangement where Kangnam would negotiate with an commercial Indian shipyard in Goa (a politically well-connected area) to license South Korean technology (much of it from Kangnam) and other South Korean manufacturers so that many of the components could be built in India under license. That effort also fell apart, apparently because Kangnam refused to accept responsibility if an Indian manufacturer failed to maintain quality standards. There were also problems with India guaranteeing that South Korean patents and trade secrets would be respected. The Indians insisted there would be no problems but the problems with the Indian defense bureaucracy and defense manufacturers are no secret and India admitted that by its continued unwillingness to provide written guarantees (with quick settlement of claims) was a major cause of Kangnam giving up. In 14 years the South Koreans obtained an expensive and painful education in why selling to India is so unpopular.
The procurement scams the Indians continue to use are numerous. For example it is common for Indian defense officials to lie about the quality or quantity of engineers and technical specialists it has available in the government procurement bureaucracy to quickly and accurately transfer the foreign technical data to the Indian manufacturers. In addition it was common for Indian firms that were selected to manufacture high tech components via license to either misrepresent their capabilities or later claim at the last minute that they did not have the personnel or equipment to handle the job. Then there were often delays as state owned defense manufacturing firms argued with each other and the government over which of them would be in charge of managing the Indian work on license built foreign components. These disputes also involve efforts by state owned defense firms to get more political support for increasing pressure on foreign suppliers to give ground on exporting defense tech to India. What no one wants to say openly is that the corruption in India, especially in defense matters, is epic and most Western defense exporters do not trust the Indians unless there are strong (and embarrassing to Indian officials) legal guarantees about the security of exported tech. Kangnam had seen enough failures and broken promises in all this and after 14 years realized the best thing they could do was walk away.
India badly needs modern MCMVs and South Korea ships are regarded as among the best in world. The South Korea mine hunters are 885 ton ships have a non-metallic hull and modifications to their engines and electrical gear to reduce noise and magnetic emissions. This reduces vulnerability to multi-sensor naval mines. Each of these MCMVs has a crew of 77 and is armed with two twin 30mm autocannon for defense. Top speed is 28 kilometers an hour, but the ship tends to operate at much slower speeds. All these advantages are the result of South Korean firms, mainly Kangnam, developing new technologies that they guard diligently. The Indians began the procurement effort in 2004 because the only mine hunting vessels they had were a dozen Russian ships they had obtained in the late 1970s. These ships are worn out and even in 2004 it was believed the last of them would be retired by 2020 and that still holds although the Indian Navy believes it can keep a few of the elderly Russian mine hunters operational until 2021. But these ships use technology that is practically useless against modern mines.
The most dangerous mines are bottom mines, which lie on the bottom of shallow coastal waters. These mines are effective in waters up to 26 meters (80 feet) deep. To deal with these mines a high-definition sonar seeks out the mine sitting on the ocean floor and then sends down a USVs (unmanned seagoing vehicle, a miniature submarine) down to place an explosive charge then back off as the explosion destroys the bottom mine. The USVs are connected to the mine hunter via a fiber optic cable so the crew can see what is down there and operate the USV. Some USVs are built to be destroyed in the explosion, because they are simpler and cheaper to build that way and are simply considered am underwater “guided missile.”
The Indian Navy believes it needs 24 modern mine hunters (16 on the west coast and eight on the east coast) to keep major Indian ports open in wartime. The navy began a formal search for a new mine hunter in 2005. The notoriously sluggish Indian military procurement system performed as expected and dragged out the process endlessly. The government says it is going to solicit manufacturers again to bid on building up to 24 MCMVs. There are only a handful of firms in the world capable to building what India needs. These include Kangnam, Intermarine (Italy), Navantia (Spain), Lockheed Martin (U.S.), ThyssenKrupp (Germany) and Russia, where MCMV building is still a state run entity that cannot match Western tech. Then there is China, which has improved on Russian designs and has a lot of tech stolen from the West. China also has its own technology and companies capable to building to world standards. But China is considered the major military threat to India and is not being asked to bid on the MCMV contract. With this new effort to find an MCMV supplier it will be a minimum of eight years before India gets the first ship and by then India will have to train crews from scratch because there will be no veteran mine hunter sailors to transfer to the new ships.