Reliance firm faces punitive action over patrol vessel delay

New Delhi, December 3 

In a punitive action, the Navy has encashed a bank guarantee of the Reliance Naval Engineering Ltd in the Rs 3,000-crore contract for five offshore patrol vessels due to long delays in their supply and said on Monday that the deal was being examined.

“Punitive action has been taken against RNEL. The process is being taken forward,” Navy Chief Admiral Sunil Lanba said when asked about the huge delay in delivery of the vessels and whether Navy is under pressure to not initiate any action.

Admiral Lanba said the deal is not being cancelled at the moment, but added that it is being looked into, indicating that government may take a call on the issue. 

The Navy Chief also said that the company was undergoing corporate debt restructuring. There was no immediate reaction from RNEL about the Navy Chief’s comments. Anil Ambani’s Reliance Defence has been at the centre of a controversy over the Rs 58,000-crore Rafale jet fighter deal. The Congress has accused the government of favouring the company. The company as well as the government have rejected the charges.

The original contract for the five naval offshore patrol vessels (NOPVs) was won by Pipavav Defence and Offshore Engineering in 2011. The company was bought over by Anil Ambani group in 2016. Sources said the bank guarantee was 10 per cent of the size of the contract. The primary role of NOPVs is to undertake surveillance. — PTI

Under fire  

• First offshore patrol vessel was to be delivered by early 2015, but the deadline was pushed several times 
• Patrol vessels ’Shachi’ and 'Shruti’ were launched at the Reliance shipyard in Pipavav, Gujarat, in 2017
• RNEL was the first private sector company to obtain the licence and contract to build the patrol vessels 
• The vessels were to be armed with 76mm Super Rapid Gun Mount system