CSL did this in the 90s. And Panamax is relatively small compared to the VLOCs.
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Reliance Naval’s eligibility question holds up warship orders worth Rs 63,000 crore (Rs 630 billion)
- Thread starter Milspec
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CSL did this in the 90s. And Panamax is relatively small compared to the VLOCs.
Sorry, the 80s, not 90s.
CSL's first vessel, MV Rani Padmini was a Panamax bulk carrier.
CSL doesn't use modular construction for such ships, or else they currently go up to 110KT DWT. Maybe the brand new dry dock does.
Really ?
The yard could reduce the average time of construction of large ships in the last decade through augmentation of facilities, upgradation of ship design department with installation of Tribon and CAD/CAM software and adoption of Integrated Hull Outfitting and Painting system (IHOP) system of construction.
Hence your claim of RNaval being some sort of pioneers among Pvt sector operators in Naval ship building stands nil & void. Which in turn means they're expendable. A la ABG shipyard and deserve what they're due for, Anil bhai notwithstanding.
It's time MoD/IN put them out of their misery. I'd say go ahead with nationalisation , post which the GoI ought to draft a road map to its privatisation beginning with a merger of CSL, GRSE, MDL, GSL, HSL, etc in a behemoth named, say - Indian Shipyards Ltd and privatise that too with a road map not exceeding a 5-7 years timeline.
After all RIL ( before the division) were famous for dictating terms to vendors and squeezing the last penny from them during negotiations post which the contract would be so hopelessly one sided that one literally had to write off the retention amount or see the PBG forfeited, in addition to seeing delayed payments for work undertaken on grounds that the paperwork ( which would put any self respecting sarkari babu or dpt to shame) was incomplete plus listen to taunts from their top management - If they aren't capable enough to execute this project, let's buy them off, which was duly conveyed to our HQ, which in turn informed Bombay House, who issued instructions that dealings with RIL ought to be avoided as several other group companies had similar stories to narrate and the feedback from a lot of EPC cos as well as other suppliers in the market was identical.
Time to pull a Modh Baniya on a Modh Baniya. Who better to do it than Narendrabhai!
P. S - while Anilbhai' group cos are bankrupt or on the verge, that hasn't prevented him from constructing a 1000 crore high rise apartment block for himself on Bandra Sea face with Tinaben supervising the interiors, going so far as to inspect merchandise at the OEM's all across the world. How do you like that!?
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The design for the 1500T OPV was finalized in 2014, so design issues were adressed and delay from 2010 to 2014 can be explained. What stops the, from delivering in between 2014 to 2018. its been 4 years, in half of that time fram 3 OPV are ready two of them commisioned by L&T. So no, your claim that they can spit out ships at same speed is completely bogus.
Thats a MoD problem, let the RM answer to that. Within the given structure, for open bidding why should PSU's be not allowed, they quote lower than the Private shipyards.
So are their cash reserves, simple question, to execute such are large project where will they get money, the answer is debt, and how will they service that debt on an annual basis when delivery is 4-5 years out. The answer is they wont be able to.
irrespective what has happened to RNEL post March 2015 (other than ADAG takeover) that it's losses are growing exponentially?[/QUOTE]
I would highly suggest for IFCI/IDBI/LIC/Vijaya to roast RNEL in NCLT, get an arbitrator and then auction off pipavav so either of the DPSU's can bid and get the shipyard.
Not really. Just because CSL can do modular construction doesn't mean it's at the same level as RNEL or L&T. Not everybody uses the same technology.
And no, they are not expendable, particularly RNEL and L&T Shipbuilding. The PSUs are not competitive in reality. They simply undercut the private sector and make up the rest with time overruns.
That's a very bad idea. It will create a monopoly. It's fine if our govt was authoritarian, where trade unions don't exist, but not in a democracy.
This won't fly with MoD contracts. Everything is scrutinized by CAG, and overseen by the Parliament committees when necessary. Even the forces do their own audit. Anil can't screw around with defence contracts due to the level of scrutiny in them, including media.
And unlike other projects, vendors are crucial for defence tech. And due to the paperwork involved, it's easy to sue defence companies.
Most of the defence related corruption is within the DPSUs, the latest being Tatra/BEML. In fact, the private sector will have to keep their noses clean if they want contracts. You already see what's happening with the Rafale deal, even though the contract is clean.
That's the point. ADAG has shit loads of money. If they think RNEL is going to become profitable, money will promptly go into it.
2014 is when the design was shows the public, that doesn't mean that's when production began. Let's wait for more info to come in. The fact is the ships were launched in 2017. That's extremely fast for a first timer even if production began in 2014.
They quote lower because taxpayers pay for the infrastructure they built. Remove that from the equation. What do you want, cheap ships today, followed by cost and time overruns where the ships become more expensive, and also late? L&T has never had time overruns. RNEL will follow suit once they get going.
Our civilian shipping industry sucks. RNEL and L&T need naval orders to survive. You see that even L&T is under loss, so are the other private sector shipyards, many are insolvent. So this is not an RNEL problem only. ADAG has the money that can bail RNEL out of any amount of debt, it's peanuts for them.
What you are proposing is we should bankrupt RNEL, destroy the LHD tender thereby delaying the IN's need for LHDs by half a decade, if not more, and lose out on a highly strategic shipyard. It's a lose-lose-lose situation for the private sector, MoD and the navy if we do this.
A better option is to keep RNEL afloat for a few more years. This will allow the LHD tender to stay active. And RNEL can build up after winning a few tenders. A number of tenders are set to be released after 2019-20, so RNEL should stay alive until that point. If they still can't survive, then they can disappear.
The fact is the IN's requirement is so high that the PSUs cannot handle it. And keeping only one private sector company active among them is stupid. L&T will eventually become a monopoly. In time, it will be impossible for the DPSUs to keep up with the private sector.
What's doubly interesting is even though RNEL seemingly has large amounts of debt, they could still bid lower than L&T for the shallow water craft tender, which is a pretty significant advantage over L&T.
Since my knowledge on the subject matter is limited, I'd refer this one to @Amal
Hence my repeated statements calling for their privatisation post haste. Besides, with Anilbhai managing the show at RNaval, what makes you think they won't follow the same example.
I thought you were arguing for privatization of HAL earlier, simply because the unions ruled the roost there, existing manufacturung systems were outdated and it's a bloody monopoly. What made you sing a different tune here?
Why do you think I penned that little essay on the SOP of RIL w.r.t vendors and contractors in my earlier post which you've quoted ? To show off my erudition and knowledge ? or to give you an insight into one of the most unscrupulous industrial behemoths ( and that's how they've made their fortune) in modern Indian industrial history? Do you think the MoD or the armed forces can't be subverted? That politicians and bureaucrats can't be bought? Man, which country are you living in?
You didn't get the context of my argument regarding paperwork.
Please refer to my argument above in this very post as to why do you think pvt defence contractors are all honest chappies. I'm not sure if you're aware that its an open secret in the market that L&T - ECC has no qualms about offering a cut on every contact they win in the EPC sector. So do all their competitors.
What makes you think they won't extend this practise to defence?
I've already cited the case of RIL. Why then do you keep harping on scandals in DPSU's exclusively is beyond me?
The Rafale deal could've been better handled had Modi not been so secretive about it. Perhaps he underestimated RG and was a victim of his own hubris. He could easily have given the purchase price & LCC break up in Parliament along with a list of Off sets - the value as well as the JV's the French consortium were getting into with their Indian counterparts.
He could've also drawn attention to the cost of Su 30 MKI in fly away condition from Russia and that of the same FA manufactured by HAL, driving home both - the cost of keeping HAL occupied and alive and the damage it's doing to the Exchequer apart from exposing the myopic vision of the Congress. He could've made a compelling case as he's extremely good in reacting to situations. He still can although it would now appear as damage control and some of the muck thrown will stick even if most washes away.
In other words, he neglected building up a strong case for the imperative of having industrial offsets Vis a vis - manufacturing in India vide a ToT which is nothing more than an assembly line
Wrong. Anilbhai is loaded not ADAG. Please check out the balance sheets of his various group cos. Are you aware he's such a fxxking cheapskate that senior officials in RCom had to reimburse a part of their salary in cash ( as high as 30- 40% of their income back to the company which would be pocketed by Anilbhai while the IT on the entire pay would be borne by the company) . A practise which would even make the old Marwari seths of the early to mid 20 th century blush with embarrassment. That's his class, his scruples / ethics or lack of it
This was in 2009.My cousin, a senior GM had to do this. He was so disgusted that he quit in 3 months.
Further, please show me a single industrialist anywhere in the world who invests his own fortune to build up a business and sustain it and I'd show you a fool. If they're doing it in the west, it's because the regulatory framework and it's enforcement is that much more effective. Hence the term the robber barons of yore. Now, do you really want me to get into what's the eco system out here?
In Mumbai lingo - beta tu ne dhandha hi samjha nahin.
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Even if production began in 2014, this is extremely fast? Even when L&T has delivered 3 of these ships started in 2016. How exactly?
I would highly recommend to understand basic accounting. What public pays for a DPSU, it is public debt from financial institutions at government risk, and then these DPSU's repay this debt from the profits they make. Once they have cleared their debts, they create profit, and percentage of it goes back into modernization, R&D, dividends back to stake holders, and cash reserves. When Cash reserves surges, they have the ability to take on a project like an aircraft carrier, when they don't need to invest they generate massive interests which is used as for operating costs. Guess who else has ability to similar that where they create massive cash reserves? most of the successful scrips of Nifty 50 TCS, Infosys, ITC, Hind Lever, Maruti, hero motors, etc.
On the flipside, when your entire business model is based on debt, you need to have the ability to service the debt, if you don't you either have to capitalize the interest or need to keep raising cash to service that debt.
Now about your tax payers quip, the debt that Anil Bhai raises in all of his ADAG, who do you think pays for that ? HDFC, yes bank? No it's IDBI, Vijaya, SBI, and other PSU banks> TAX PAYERS. Guess what happens when such companies go under, whose money is lost?
Really does it now.
Rcom Debt 47234 cr Reserves 1400 cr
Rinfra Debt 23144cr Reserves 23795 cr
RNEL Debt 9878 cr Reserves -514.69 cr
Rcap Debt 46000 cr Reserves 14954 cr
Rel nippo Debt 0 cr reserves 1633 cr
Debt 126,256 cr. Reserves 41267.31. Please do explain where is money that ADAG has? And as usual don't duck this one. You keep claiming ADAG has the money to bail out RNEL, where exactly is this money? I can't see it any of their balance sheets.
Now coming to sustaining strategic business, learn the concept of a moat, thats what L&T, Godrej, Tata Power SED, Mahindra Defence have done. That is something RIL could have done, because these are industry leaders. ADAG on the other hand is NOT an industry leader in any of the segments it operated in thus it has no Moat to sustain a strategic project like a defense company.
I am not proposing any such thing, they already are Bankrupt, when you have negative cash reserves you are teetering on bankruptcy. And as I said there is no loosing here, All I am saying is kick out ADAG and it's poor leadership and pipavav should be fine under any new leadership, even DPSU leadership.
That is not GoI or navy to decide, thats for the banks to decide. I would support an NCLT case against such poor management.
When Pipavav goes to auction, there is no restrictions for other private undertakings not to bid. nothing stops Tata, Mahindra, RIL, L&T, and others to bid. I would go even further get dassualt to get them out of DRAL (just for kicks
)No it's not. Both CSL and GRSE have close to nothing when it comes to debt, but they dont quote the same. You cant slap your existing debt to every project that you quote, that is just plain stupid. Your debt servicing cost does not make up your production cost, it's a business overhead which is to be serviced from your margin, but your margin is not be decided on your debt servicing needs, this is not someone running a thela.
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L&T made their own design, that's a big advantage right there. And unlike RNEL, they have enough working capital. So it's not a problem with shipbuilding, it's a problem with money with RNEL.
The problem is we don't know how they calculate their costs.
Nomination is the bigger problem though. Guaranteed deals = guaranteed debt servicing using more debt, even if the DPSU screws up. Time and cost overruns is how they earn their money as well.
I don't really care about ADAG overall. But their defence units are highly strategic, and need to survive. This includes DRAL.
RNEL is a subsidiary of RInfra. They have enough money to pay off RNEL's debt.
I am not proposing any such thing, they already are Bankrupt, when you have negative cash reserves you are teetering on bankruptcy. And as I said there is no loosing here, All I am saying is kick out ADAG and it's poor leadership and pipavav should be fine under any new leadership, even DPSU leadership.
Have to see what happens then. But I agree, if ADAG cannot handle it, then they can sell their stake to another business. But if they get something like the LHD contract or even the new missile corvette contract, then they are good to go.
When Pipavav goes to auction, there is no restrictions for other private undertakings not to bid. nothing stops Tata, Mahindra, RIL, L&T, and others to bid. I would go even further get dassualt to get them out of DRAL (just for kicks
There is a good chance Pipavav will not be auctioned. Rather, I see RNEL buying off the share of the promoters and increasing their stake to more than 55%. And there's a good chance RNEL will get the LHD contract, 'cause the Mistral is cheaper being a smaller and lighter ship.
I want them all privatised, but that's not gonna happen. What will happen is competition from the private sector will erode the competitiveness of DPSUs, and they will simply shut shop, with privates scavenging whatever they want.
Nobody wants to buy DPSUs and inherit the trade unions also. So HAL won't get privatised, just die out.
No, MoD or the armed forces cannot be subverted or bought off easily. It's one of our cleanest ministries in fact.
The thing about defence corruption, you get caught, you are likely to permanently lose your business. Like what happened to Tatra. It's in your interest to play by the book. This is also why LM and Boeing are among the cleanest companies in the world.
You have only 1 real customer after all.
They won't survive in defence then.
All of this is public and was revealed on day 1.
As for offsets, the process is yet to be completed. It's expected next year. The govt has no information about offsets yet. The French have to finish their task and then inform the govt about it.
The problem is when it comes to defence, the govt can't wash their dirty linen in public. These are not stuff you're supposed to bring to public notice. What Congress is doing is unbefitting of a national party.
As I have already mentioned elsewhere, the Congress is aware of the truth. They are not interested in facts, only in controversy. They need someone like the CAG or the Supreme Court to shut them up. Nothing Modi says will work, instead it will simply create more divisions.
I never said anything about Anil pouring his own money here.
Anyway, a family member of mine was the CEO of a very, very large retail company. He told me everybody is corrupt, no one is clean. But I assure you, any large scale corruption in defence will only lead to permanent retirement. This is not all fun and games as the EPC sector. Companies have been blacklisted for very minor transgressions in defence.
make up your mind man, one min you are claiming RNEL is as good as l&T, l&T delivered 3 ships with the first laid in 2016, while RNEL has delivered Zero.
What? read any annual report. You will know how costs are calculated.
Dude, what nonsense are you posting, you do realize that Government shipyards MDL and GRSE have zero debt. It doesn't need to service any debts. CSL has less than 5% debt and massive cash reserves, more than your entire net worth of adag group.
Lol, you sure about that, even the PR guy for Anil ambani doesn't bat that hard for adag.
Rinfra Debt 23144cr Reserves 23795 cr, its own debt is more than it's reserves. They do not have money to pay thier own debts, forget RNEL's.
What has ADAG been able to handle till date, its run down Rcom, RNEL is following, RCAP is already over leveraged, Rel-Nippon has eroded half it's mkt cap.
lol, company is teetering on NCLT, and being declared NPA, and you see Anil Bhai increasing stake.
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That's fine. That's why I told you to look at the 5 ships as a whole, and not just look at one ship.
RNEL's project being a navy program is much more complex than the Coast Guard's OPV program.
The tender bid cost, which is a national secret, not their annual report.
Why do they need debt? All I'm saying is they are being given guaranteed contracts.
DPSUs don't have to raise money by themselves, get guaranteed contracts, and then make their money using cost and time overruns.
Private companies have to raise money through debt, and then compete with something like 10% of all contracts.
Can't help it. No one else is grabbing international attention as they are.
The Russians chose Reliance, then the govt had to force the Russians to switch to GSL for the frigates. The Americans chose them for their 7th Fleet. The French chose them for both Mistral and the Rafale.
Hell, the French are interested in cooperating with Reliance for P-75I as well, until the govt decided to nominate MDL instead.
Even for the K-226 and S-400, the Russians chose Reliance over any other company. The Ka-226 was handed over to HAL because the govt refused to nominate Reliance for the program, because the govt doesn't nominate private companies (the irony). And the S-400 deal was scrapped because the govt decided to remove the offsets component in it.
If they are attracting all the heavy-hitters, then they are doing something right.
RIL is practically bailing out RCom with the assets purchase and the exit of ADAG from Telecom. And RInfra is a large and profitable company. It's more than enough to sustain their defence forays.
Defence production is not expensive anyway.
I give up. I'm not contesting his claims anymore.Can wake up a guy who's asleep not someone pretending to be asleep. I leave the field open to you.You seem to have more patience than me. And I know someone who is blessed with Buddha like patience.Where's @Sancho when you need him?make up your mind man, one min you are claiming RNEL is as good as l&T, l&T delivered 3 ships with the first laid in 2016, while RNEL has delivered Zero.
What? read any annual report. You will know how costs are calculated.
Dude, what nonsense are you posting, you do realize that Government shipyards MDL and GRSE have zero debt. It doesn't need to service any debts. CSL has less than 5% debt and massive cash reserves, more than your entire net worth of adag group.
Lol, you sure about that, even the PR guy for Anil ambani doesn't bat that hard for adag.
Rinfra Debt 23144cr Reserves 23795 cr, its own debt is more than it's reserves. They do not have money to pay thier own debts, forget RNEL's.
What has ADAG been able to handle till date, its run down Rcom, RNEL is following, RCAP is already over leveraged, Rel-Nippon has eroded half it's mkt cap.
lol, company is teetering on NCLT, and being declared NPA, and you see Anil Bhai increasing stake.
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