Indian Navy has cautioned Reliance-controlled Pipavav shipyard in Gujarat of penalties if it delays the delivery of ships and other contract works.
The shipyard has not been able to meet deadlines, which in turn has adversely affected the operational capabilities of the Navy, naval officials were quoted by The Hindu Friday.
Reliance-controlled Pipavav unit, however, is confident of delivering on time. 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. Further the shipyard is also bidding for several major contracts.
The company’s involvement with the military is believed to outweigh 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. The first two NPOVs are scheduled to be launched by May 2017 and delivered by October and December 2017, according to fresh revised timeline provided by the Navy,
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.
The firm had accelerated work since the RDEL took over, a Reliance official said.
“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.