SOURCE: LIVE MINT
The Ministry of Defence has cancelled Reliance Naval and Engineering Ltd’s (RNEL) ?2,500-crore contract to build naval offshore patrol vessels (NPOVs) for the Indian Navy, owing to delay in delivery of the vessels, a person familiar with the matter said on Friday.
The contract was cancelled two weeks ago due to the delay in the delivery of the vessels, the person said. Reliance Naval and Engineering Limited (RNEL) did not comment on the report immediately.
The contract to build five warships was signed with the company in 2011, before the Reliance Group took over the Gujarat-based shipyard from its erstwhile owner Nikhil Gandhi.
The Reliance Group took over Pipavav Defence And Offshore Engineering Ltd in 2015 and later renamed it as Reliance Naval and Engineering Ltd (RNEL).
The cancellation of the NOPV contract has cast a shadow over the bidding process of RNEL, which is currently going through the debt resolution process in the National Company Law Tribunal (NCLT).
IDBI, the lead banker of the consortium of lenders of RNEL, had taken the company to the NCLT Ahmedabad due to the default in loan repayment, a PTI report said.
RNEL has an outstanding debt of over ?11,000 crore.
In August, 12 companies had submitted expressions of interest (EOI) for RNEL. These included APM Terminals, United Shipbuilding Corporation (Russia), Hazel Mercantile Ltd, Chowgule Group, Interups (USA), Next Orbit Ventures, ARCIL, IARC, JM ARC, CFM ARC, Invent ARC and Phoenix ARC, the PTI report added.