RELIANCE NAVAL CONTRACT TERMINATION | ANOTHER SETBACK TO ANIL AMBANI | 2020

 RELIANCE NAVAL CONTRACT TERMINATION 

Another huge setback has befallen the once-wealthy Anil Ambani, who is struggling financially.

The Indian Navy has terminated the NPOV (Coast Guard Ship) contract with Reliance and Naval Engineering Limited.

According to sources, the Rs 2,500 crore deal has been canceled. Under the 2011 agreement, Reliance Naval was to build a total of five warships and hand them over to the Indian Navy.

But the respective groups explained that the Navy had terminated the contract as it had not yet provided the ships. The money paid till now by the government for the NOPV project has been recovered through the cashing of the RNEL bank guarantees worth Rs 980 crore ($130 million) in 2018. 

However, the time lost by the navy in inducting these NOPVs cannot be compensated, the officials said.

The defense ministry is currently seized of the navy’s recommendation for the cancellation of the contract. However, the consideration before the ministry officials is the partially-built warships that are docked at the shipyard and if the two of the five NOPVs could be finished and delivered to the navy at the earliest.

Why should the navy give up on an asset that could be readied quickly, as partial construction has been completed on the NOPVs? This a question that the defense ministry is grappling with, the officials told Defence. Capital.

The deal comes before the Reliance Group acquired the Gujarat-based Pipavav Defense and Offshore Engineering Limited shipyard.

Then in 2015, Reliance Group transformed Pipavav Defense and Offshore Engineering Limited into Reliance and Naval Engineering Limited.

RNEL declined to comment on the development.