Millennium Post

Punitive action against RNEL, Navy encashes bank guarantee

NEW DELHI: In a punitive measure, the Navy has encashed a bank guarantee of the Reliance Naval Engineering Ltd in the Rs 3,000-crore contract for five offshore patrol vessels due to long delays in their supply and said Monday that the deal is being examined.

"There is no preferential treatment being given to RNEL. Its bank guarantee has been encashed. Punitive action has been taken against it. The process is being taken forward," Navy Chief Admiral Sunil Lanba said at a press conference.

The Navy Chief was asked about the massive delay in delivery of the vessels by RNEL and whether Navy is under any pressure not to initiate any action against the company.

Admiral Lanba said the deal is not being cancelled at the moment, but added that it is being looked into, indicating that government may take a call on the issue.

The Navy chief also said that the company is undergoing corporate debt restructuring.

There was no immediate reaction from RNEL about the Navy chief's comments.

Anil Ambani's Reliance Defence has been at the centre of a controversy over the Rs 58,000-crore Rafale jet fighter deal. The Congress has accused the government of favouring the company.

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