The Indian Ministry of Defence (MoD) has reportedly cancelled the contract previously awarded to Reliance Naval and Engineering (RNEL) for the construction of naval offshore patrol vessels (NPOVs) for the navy.
Mint quoted a person with knowledge of the matter as saying that the Rs25bn ($342.47m) contract was cancelled due to the delay in the delivery of the vessels.
In 2011, the contract was awarded to the company for the construction of five ships, prior to which the shipyard in the Indian state of Gujarat was taken over by Reliance Group.
In 2015, the group took over Pipavav Defence And Offshore Engineering, which was renamed as Reliance Naval and Engineering (RNEL) in September 2017.
This cancellation of the contract is said to have a negative impact on the company’s bidding process. RNEL is currently undergoing a debt resolution process in the National Company Law Tribunal (NCLT).
PTI reported that the lead banker of the consortium, IDBI took the company to the NCLT as it did not complete the loan repayment. It currently has an outstanding debt of more than Rs110bn ($1.51bn).
As of August, 12 companies submitted expressions of interest (EOI) for the takeover of RNEL.
Last month, the MoD announced the start of construction on the Indian Navy’s third ship (Yard- 12653) under the P17A-class stealth frigates.
A keel was laid by Indian Navy COM & CWP&A vice-admiral S R Sarma and additional secretary V L Kantha Rao.
In August, India reportedly planned to launch the bidding process for six submarines for the navy, under a project worth Rs550bn ($7.5bn).
During the same month, the Indian Navy also launched the Naval Innovation and Indigenisation Organisation (NIIO) to fulfil its requirements relating to technology.