MoU for the facility at Rambilli was signed at the CII summit in 2016

The meeting of Reliance Anil Dhirubhai Ambani Group chairman Anil Ambani with Chief Minister N. Chandrababu Naidu at Velagapudi near Vijayawada recently assumes importance in the wake of reports that uncertainty dogs the proposed investment of ₹5,000 crore in the world-class naval shipbuilding facility at Rambilli, about 70 km from here.

The issue, along with other investment proposals in Andhra Pradesh, is understood have figured at the meeting.

Though the MoU for the shipbuilding facility was signed by Mr. Anil Ambani and Mr. Naidu in the presence of Union Ministers Arun Jaitley and Nirmala Sitharaman at the CII Partnership Summit here on January 11, 2016, there had been no progress so far.

Financial Constraints

Reports say that Reliance Naval & Engineering Ltd (formerly Reliance Defence & Engineering Ltd), the project proponent, is experiencing severe financial constraints. An insolvency case is pending before the National Company Law Tribunal.

Though the Reliance ADA Group sought 3,000 acres of beachfront area at Rambilli, where the Naval Alternate Operational Base (NAOB) with docking facility for India’s nuclear armed Arihant Class submarines is coming up, the government has offered 1,000 acres in the first phase. The project proponent envisaged further investment of ₹5,000 crore to ₹10,000 crore in the next phase. At the time of signing the MoU, Mr. Anil Ambani had said that there were proposals for investment of ₹3 lakh crore in the next 15 years in naval fleet modernisation and acquisitions.

Sources said the State government offered 1,000 acres on outright sale through the A.P. Industrial Infrastructure Corporation at ₹17.5 lakh per acre to the Reliance Group, but it reportedly sought land at ₹1 per acre per year on a 99-year lease.

Doubts Over Warship Unit

Kolkata-based Garden Reach Shipbuilders & Engineers Ltd, a Ministry of Defence enterprise, had sought land for establishing a warship manufacturing facility at Rambilli three years ago. After that there is no progress on the proposal.

The city is home to two shipbuilding facilities – Hindustan Shipyard Ltd and Ship Building Centre, which constructs Arihant Class submarines.