NEW DELHI (Sputnik) — India is likely to intervene through diplomatic channels to rescue a deal to provide the Philippines with a warship after a Kolkata-based shipyard failed the buyer's financial assessment tests in spite of having made the lowest bid.
In fact, Kolkata-based Garden and Reach Shipbuilders and Engineers had made a Rs 21.5 billion ($324 million) bid to supply two frigates to the Philippines. However, the state-owned company suffered a setback after it failed to meet a financial requirements post-qualification assessment by the Philippines navy. The Philippines navy was impressed with the company's physical infrastructure and capability but it did not have the adequate funds available to make vessels over the next few years.
Currently, the Indian government is exploring various options to revive the contract. India is likely to provide guarantees that the yard would be offered financial assistance in order to execute the contract.
The Philippines is a close ally of India and in view of the recent decision by a Hague tribunal, the Philippines need vessels for patrolling the South China Sea.
"India has been actively trying to increase its sphere of influence in the Indian Ocean. India has its commercial and strategic stake in South China Sea, also mainly as a bulwark to counter Chinese influence in the Indian Ocean. Therefore it is imperative for India to support the littoral countries around the South China Sea; helping Philippines is part of India's strategic objective," Former Indian ambassador and author of book "Diplomatic Dimensions of Maritime Challenges for India in the 21st Century" Yogendra Kumar told Sputnik.
