Reliance Defence to build 14 Fast Patrol Vessels for Indian Coast Guard

defence-banner-sizeIn one of the Largest Naval Order to Private Sector by Indian Coast Guard, Anil Ambani promoted Reliance Defence and Engineering Limited (RDEL) has emerged a winner in a competitive bidding process to build 14 Fast Patrol Vessels ( FPVs); contract value of Rs. 920 Crores.

The vessel will be designed in-house and built by RDEL at its Pipavav Shipyard. The Contract to build these 14 patrol vessels will be signed shortly, said a statement from Reliance Defence.

“RDEL emerged L1 wherein 6 bidders from Defence PSU Shipyards and Private Sector Shipyards participated… the L2 and L3 bidders were Goa Shipyard Limited (L2 bidder), L&T (L3 bidder),” the company said.

These Fast Patrol Vessel are Primarily designed for patrolling anti-smuggling and anti-terrorist operations, fisheries protection and search and rescue.

These are Critical vessel to support the Navy during wartime as a coastal convoy escort and a communication link.

Few weeks back, Defence Ministry cleared Reliance Defence and Engineering Ltd (RDEL) for defence projects after a financial and technical capability of the company’s shipyard was carried out in detail.

The Defence Acquisition Council (DAC) in its last meeting cleared the capacity assessment of RDEL, which is a big boost for the company after it was taken over by Anil Ambani led Reliance Group.

This makes RDEL eligible for participation in all defence projects particularly Naval Warships and Submarines

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One commentOn Reliance Defence to build 14 Fast Patrol Vessels for Indian Coast Guard

  • This is not really a new tender. It has been going on for years and as usual the MoD’s decision making has been wanting in many areas. A few points that come to mind are: –

    (a) How did the Navy qualify the Shipyard? Was there a fair assessment done? It is public knowledge that the company’s debts are over USD 2 Billion!!!!! So what sort of capacity assessment was done. Somebody in MoD AND the COAST GUARD have to answer for this.

    (b) Are these vessels required? If so in what time frame? Can a company with no financial resources build them (AND THAT TOO IN THE REQUIRED TIME FRAME?).

    (c) Three months after the above article was published, the order is yet to be placed. If this is the speed of execution of the MoD / Coast Guard FOR PLACING AN ORDER, what can one expect from the Shipyard that has to build the vessel?

    (d) Does this procurement come within the ambit of DPP 2016? If so, is a company under CDR eligible for the tender? Granted that the tender was given before finalization of DPP 2016. Should this NOW not be re-tendered? Especially in light of the fact that five years after getting an order for Naval OPVs, not a single vessel has been delivered.

    (e) How many months or years will the MoD take to decide whether to award the contract to Reliance Defence OR go for a re-tender?

    (f) If there is a re-tender, Reliance Defence cannot be qualified bcos they are still under CDR. The company is unable to exit CDR because the banks are not accepting corporate guarantees and are insisting on personal guarantees from the promoters.

    (g) If Reliance Defence does get disqualified, L&T will be the only other private shipbuilder left. Both Bharati Defence and ABG Shipyard are gasping for survival. In such a scenario, Public Sector Shipyards will also have to be included.

    With all these issues lingering, it looks like the Coast Guard can safely expect delivery of the first vessel in 2022.

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