Two NOPVs to be delivered by end-2017

Reliance-controlled Pipavav unit, however, is confident of delivering on time

April 06, 2017 11:03 pm | Updated April 08, 2017 03:53 pm IST - NEW DELHI

26/12/2014: Gujarat Pipavav Port. Photo : HANDOUT_E_MAIL

26/12/2014: Gujarat Pipavav Port. Photo : HANDOUT_E_MAIL

The Pipavav shipyard in Gujarat, owned by the Reliance group headed by Anil Ambani, has emerged as the most important private shipyard for the Indian military in recent times. The shipyard, however, has not been able to meet deadlines, adversely affecting the operational capabilities of the Navy, naval sources say.

The Navy told The Hindu that it would impose penalties on the shipyard if there were delays in delivery of ships and other contract works.

Fresh impetus

Reliance Defence and Engineering Ltd. (RDEL), which took over Pipavav in early 2016, insists that the shipyard has pulled up after the new management took over and that it is confident of delivering on time.

The shipyard is now engaged in the construction of five naval offshore patrol vessels (NOPV) and maintenance of at least two other naval ships and is bidding for several major contracts. Its engagement with the military significantly outweighs work by any other private Indian shipyard.

In response to a detailed questionnaire, the Navy said there had been a 65% progress on the first two NOPVs and 30% on the other three NOPVs as on February 16. However, this is after a delay of more than two years.

The original contract for the NOPVs was signed in 2011, with the first boat to be delivered by early 2015. According to fresh revised timeline provided to The Hindu by the Navy, the first two NPOVs are scheduled to be launched by May 2017 and delivered by October and December 2017.

The remaining three are expected by November 2017 and delivered by April, June and August 2018.

Despite speculation in the past few years about the possibility of the Navy imposing a financial penalty on the shipyard, there has been no such decision yet.

Faster execution

A Reliance official told The Hindu that the firm had accelerated work since the RDEL took over.

“It’s a contractual issue. All these damages are based on discussions ... there is a standard procedure. They know what we have done and how much we have done and then we will deal with whatever it is,” he said about the penalty clause.

He stressed that when RDEL took over Pipavav, only 15% of the work was completed on the first two NOPVs, and work had not commenced on the remaining three.

The ₹2,500 crore project for five NOPVs, each weighing 2000 tonnes, was awarded in 2011, but never really took off as the Pipavav Defence and Offshore Engineering ran into a debt trap.

Pipavav is also undertaking the refit of the fleet replenishment tanker INS Deepak and survey ship INS Jamuna. The Navy stated that the normal refit has been delayed for “various reasons” and is likely to be completed by April 2017. Penalty clauses of the contract like “liquidated damages and consequential damages would be invoked in accordance with provisions of DPM-09 post completion of the refit.”

The RDEL, official, however said the contract was awarded in August 2015 and the delay was “due to significant change in the scope of the work which was done as an amendment to the contract.” He explained that when a ship goes for refit, there is a broad scope of work specified. But when it is opened up, there may be additional work required.

RDEL has already informed the Navy that the company has completed its part of the work and the ship is ready for sea trial, he said.

On the refit on INS Deepak, the Navy said the contract for refit “was awarded to RDEL on competitive basis since it emerged as L1 bidder” in June 2016.

Some Navy sources had indicated that the refit has been delayed, affecting the operational preparedness of the Navy. Mumbai-based western fleet has only one tanker, INS Deepak. However, the Navy said the scope of refit of the ship, which is now at the Mumbai Port Trust, has not been truncated.

RDEL said work began in September last year and is expected to be completed by April 30.

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