HSL inefficiency in patrol vessels construction caused Rs 200 cr loss: CAG

Hindustan Shipyard Ltd’s “inefficient execution” of the contract for construction of five Inshore Patrol Vessels for the Indian Coast Guard led to a loss of Rs 200.43 crore, a Comptroller and Auditor General (CAG) report, tabled in the Parliament on Wednesday, said.

According to the audit report on Defence Public Sector Undertakings, Hindustan Shipyard Ltd, Visakhapatnam, had, in March 2006, entered into a contract with the Coast Guard for construction and delivery of five IPVs at a total cost of Rs 231.19 crore.

As per contract, the vessels were to be delivered between March 2008 and March 2009, but were only delivered from January 2012 to May 2018.

The audit observed that in deviation to the contractual terms, HSL did not monitor the weight of the construction materials resulting in increase in weight of vessels which had a negative impact on their speed and undermined their utility as high speed patrol vessels.

Further, inefficient execution of the contract resulted in the increase in material cost, labour cost, direct expenses and overheads resulting in a total loss of Rs 200.43 crore to HSL in the execution of the project, the report flagged.

“Non-availability of Inshore Patrol Vessels to Indian Coast Guard on time also affected the surveillance patrolling of the coastal areas,” said the report.

Hindustan Shipyard Ltd is the nation’s premier shipbuilding organisation catering to the needs of shipbuilding, ship repairs, submarine construction and refits as well as design and construction of sophisticated state-of-the-art offshore and onshore structures.

Direct sea access, excellent infrastructure, skilled workforce, rich expertise garnered over the years in building 200 vessels, refitting 5 submarines and repairing 2,000 vessels of various types enable HSL to offer competent services for the defence and maritime sectors.

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