Indian Navy has encashed the bank guarantees furnished by Anil Ambani’s Reliance Naval and Engineering Ltd for delay in completion of three naval offshore patrol vessels.
Indian Navy has encashed the bank guarantees furnished by Anil Ambani’s Reliance Naval and Engineering Ltd for delay in completion of three naval offshore patrol vessels, Admiral Sunil Lanba, the chief of Indian Navy, confirmed for the first time today.
No preferential treatment is being given to Reliance Naval, Sunil Lanba said responding to a question about preferential treatment being given to reliance vis a vis delivery of the vessels. “The company is undergoing corporate restructuring and they are being taken to court by their bankers IDBI,” he added, while addressing annual press conference ahead of the Navy Day on 4 December.
Anil Ambani’s Reliance Defence and Engineering Ltd changed its name to Reliance Naval and Engineering Ltd in 2017. The Rs 2,500-crore order for the naval offshore patrol vessels (NOPVs) was inherited by Reliance Defence as part of its acquisition of Pipavav Defence. The P-21 project was initially bagged by Pipavav Defence in 2011, with the first NOPV slated to be delivered by early 2015.
In 2017, after 16 months of taking over of Pipavav Defence and Offshore Engineering Company, two naval offshore patrol vessels (NOPVs) were launched at the shipyard under the Reliance Naval banner. The two NOPVs, named ‘Shachi’ and ‘Shruti’, were the first warships to be launched by a private sector shipyard in India.
The work on the remaining three ships has been stuck for a while due to financial and technical constraints troubling the shipyard, due to which the entire project has been delayed.
The private company was the first to host one of the largest dry docks in the country and was the first to obtain the licence and contract to build NOPVs. According to an earlier press release issued by the company, “The modern warship has a length of 105 metres with a displacement of 1500 tonnes. It would be propelled by two diesel engines which can deliver speeds up to 25 knots and has an endurance of about 6,000 nautical miles.”
The shipyard that was acquired by Reliance Defence has the only modular shipbuilding facility in India with a capacity to build fully fabricated and outfitted blocks. The fabrication facility spread over 2.1 million sq ft has an annual capacity of 144,000 tonnes.
Ever since Reliance Defence took over the shipyard in January 2016, the firm accelerated operations, as well as bid for and bagged other orders. It is also engaged in the construction of a training ship as well as 14 Fast Patrol Vessels (FPVs) for the Coast Guard at a cost of Rs 920 crore.
Recently, according to media reports, IDBI Bank Ltd approached Ahmedabad bench of the National Company Law Tribunal (NCLT), against Reliance Naval for defaulting on loans totaling more than Rs 1,250 crore. IDBI said in its petition that Reliance Naval is facing financial stress due to a downtrend in commercial shipbuilding sector, cancellation of contracts and cost overrun of dry dock-2 project under construction.