Mumbai: Shipbuilder Pipavav Defence and Offshore Engineering Co. Ltd is set to win a contract worth about 920 crore from the Indian coast guard to design and construct 14 fast patrol vessels, or FPVs.

The company said on Thursday it had been declared the lowest bidder for the order under a competitive bidding process.

The Mumbai-based company earlier secured a much larger contract worth about 2,975 crore from the ministry of defence for building five naval ships.

FPVs are primarily used for patrol within exclusive economic zone, coastal patrol, anti-smuggling, anti-piracy and search and rescue operations.

Securing contracts to build warships has emerged as an option for local shipyards seeking to sail through a global downturn in the industry and experts believe that more companies will bid aggressively for defence contracts as commercial orders are drying up.

The navy and the Indian coast guard have lined up projects worth at least 50,000 crore for the next 10-15 years to patrol the country’s coastline that stretches over 7,400km, according to the defence ministry. The government is also focusing on enhancing local defence production with private participation.

In July, the government cleared Pipavav’s proposed joint venture with state-run Mazagon Dock Ltd to build warships for the Indian Navy. In September 2011, the defence ministry had put on hold the planned joint venture after rival companies said the selection of Pipavav lacked transparency.

In a 31 July statement following the clearance, Pipavav said it was looking forward to joint marketing initiatives to tap the growing global demand for warships and submarines through its joint venture with Mazagon Dock. The company said it had “submitted bids worth $2 billion in various countries with respective local partners."

Pipavav Defence shares were nearly unchanged at 51.80 apiece in early trade on Thursday.

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