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CAPACITY ASSESSMENT OF PRIVATE SHIPYARDS – NEED FOR A RELOOK. Cdr Kinshuk De IHQ MoD(N)/DSP. WHAT IS CAPACITY ASSESSMENT OF SHIPYARDS. Organisation & Infrastructure Shipbuilding Experience Product Profile Details of Collaboration Turnover and Financial Health

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what is capacity assessment of shipyards

WHAT IS CAPACITY ASSESSMENT OF SHIPYARDS

Organisation & Infrastructure

Shipbuilding Experience

Product Profile

Details of Collaboration

Turnover and Financial Health

Personnel with Background

Orders Executed in last 05 years

Orders in Hand and Future Orders

Plans

production facilities and process control design capability quality control procedures legal issues

WHAT IS CAPACITY ASSESSMENT OF SHIPYARDS

Production facilities and Process Control

Design Capability

Quality Control Procedures

Legal Issues

capacity assessment present process

CAPACITY ASSESSMENT – PRESENT PROCESS

Capacity Assessment Committee scrutinises Report of WOT with inputs of Domain experts

Report approved by CWP&A

RFP for Type of ships are thereafter issued to Shipyards with valid and current Capacity Assessment

Validity is Two Years

shipbuilding world statistics

SHIPBUILDING – WORLD STATISTICS

62% vessels are delivered in good quality, within the budget and on time. 27% of vessels are delivered beyond one year after delivery date.

11% orders either get cancelled or land up in arbitration

naval shipbuilding through private shipyards uncertainties risks

NAVAL SHIPBUILDING THROUGH PRIVATE SHIPYARDS – UNCERTAINTIES & RISKS

Private Sector participation will improve the overall cost benefit, competition, participation, sector development, widen expertise etc

Due diligence, risk assessment during the decision making process

Need for continuous assessment of the shipyards for their capacity and competence to deliver Naval Warships

naval shipbuilding through private shipyards uncertainties risks13

NAVAL SHIPBUILDING THROUGH PRIVATE SHIPYARDS – UNCERTAINTIES & RISKS

Private shipyards have defaulted to deliver Yardcrafts and Survey vessels on time primarily due poor financial health, error in assessment of costs and shipyard capacity

Issuance of RFPs may have been an error due in-accurate assessment of financial strength

Limited Domain expertise within Navy to look at Balance Sheets

naval shipbuilding through private shipyards uncertainties risks14

NAVAL SHIPBUILDING THROUGH PRIVATE SHIPYARDS – UNCERTAINTIES & RISKS

Shipyard’s ability to compete and stay in business is greatly affected by its ability to know what it costs to do business

naval shipbuilding through private shipyards uncertainties risks15

NAVAL SHIPBUILDING THROUGH PRIVATE SHIPYARDS – UNCERTAINTIES & RISKS

Need for rigorous financial assessment as per checklists prior to Capacity Assessment by Credit Rating agencies with knowledge of present market dynamics, risks, rating of clients, management etc

Process initiated

naval shipbuilding through private shipyards recommendations

NAVAL SHIPBUILDING THROUGH PRIVATE SHIPYARDS – RECOMMENDATIONS

Check Lists

Financial assessment by Credit Rating Agencies

Reputation of management, Promoters, track record and experience

Assessment of production facilities, production process, productivity,

Logistics

Current order book,

Knowledge, innovation, product mix, workforce

naval shipbuilding through private shipyards recommendations17

NAVAL SHIPBUILDING THROUGH PRIVATE SHIPYARDS – RECOMMENDATIONS

Check Lists

Planning & design infrastructure

Organization & HR practices

Procurement procedures

Subcontractors, quality assurance, safety, health and environment

Relationship with unions

naval shipbuilding through private shipyards recommendations18

NAVAL SHIPBUILDING THROUGH PRIVATE SHIPYARDS – RECOMMENDATIONS

Need for weighted consideration of factors in Capacity Assessment with emphasis on financial assessment for Risk Assessment to ensure Quality Warships, Within Costs and on Time for our Navy