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Business News/ Industry / Manufacturing/  Reliance Defence signs warship repair pact with US Navy

Reliance Defence signs warship repair pact with US Navy

The deal may generate Rs15,000 crore revenue for Reliance Defence over next three to five years

Reliance Shipyard was qualified by US Navy as an approved contractor to perform complex repair and alteration services for the US Navy’s Seventh Fleet vessels. Photo: Reuters

Gandhinagar: Reliance Defence and Engineering Ltd on Monday said it has signed an agreement with the US Navy for undertaking service, maintenance and repair of Seventh Fleet of US Navy at the Reliance Shipyard at Pipavav in Gujarat.

Front-line warships, supply vessels and patrol vessels are part of the Seventh Fleet, which operates in the Indian Ocean region. These ships currently visit shipyards in Singapore or Japan for repair and maintenance work.

A Reliance executive said on condition of anonymity that the deal may generate Rs15,000 crore revenue over next three to five years.

In 2015, the Anil Ambani-led Reliance Group company took over Pipavav Defence, a private shipyard in Gujarat. Set up in 1997 by Nikhil Gandhi-promoted Sea King Infrastructure Ltd, Pipavav Shipyard was in 2010 allowed to build strategic and defence vessels. Its name was later changed to Pipavav Defence and Offshore Engineering Co. Ltd.

“Over 100 ships of US Navy operating in the Indian Ocean can now avail services at Pipavav shipyard. This is for the first time that an Indian shipyard has been selected by the US Navy for repair and maintenance work. From the last one year, we have been working in this direction. US Navy follows some of the most stringent standards; so we are hopeful that this deal would lead us to bagging similar projects in other countries as well," the official cited above said.

“Every year, the US Navy spends close to Rs3,000 crore for maintenance and repair services for the Seventh Fleet and this business opportunity would now come to India," the official mentioned above added.

In January 2017, the shipyard was qualified by US Navy as an approved contractor for repair, service and maintenance of its Seventh Fleet.

Reliance Defence said it is the first private sector company in India to obtain the licence and contract to build Naval Offshore Patrol Vessels for Indian Navy. The shipyard has the only modular shipbuilding facility in India with a capacity to build fully fabricated and outfitted blocks. The company recently signed an agreement with Gujarat government at the Vibrant Gujarat Global Investment Summit for investing about Rs2,500 crore at Reliance Shipyard for land systems.

The deal follows a logistics pact signed on 30 August 2016 between India and US during defence minister Manohar Parrikar’s US visit, according to the Reliance executive quoted earlier. The logistics exchange memorandum of agreement (LEMOA) is a tweaked India-specific version of the logistics support agreement (LSA), which the US has with several countries it has close military to military co-operation. LEMOA gives access, to both countries, to designated military facilities on either side for the purpose of refuelling and replenishment.

Reliance Group companies have sued HT Media Ltd, Mint’s publisher, and nine others in the Bombay high court over a 2 October 2014 front-page story that they have disputed. HT Media is contesting the case.

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