Dramatic Movement Forward: Anil Ambani Gets Land in Andhra Pradesh for Shipyard
Anil Ambani in Andhra Pradesh
NEW DELHI: From Gujarat to Maharashtra to now Andhra Pradesh. Anil Ambani is fast expanding his defence empire under Reliance Defence Limited, a wholly owned subsidiary of Reliance Infrastructure Limited. The Andhra Pradesh government is the latest in line to provide land---1500 acres---for a Reliance shipyard, 70 km south of Vizag, “co-located with strategic facilities of the Indian Navy and Department of Atomic Energy.”
Last year, shortly after his entry into the defence market the Maharashtra government allotted 289 acres of land in Nagpur to Anil Ambani’s Reliance Aerostructure Ltd. Ambani himself admitted, as reported by The Citizen at the time, “We started on 16 June 2015 with the first presentation and in less than 10 weeks we got the land. This is a record.”
This land will contain the Dhirubhai Ambani Aerospace Park (DAAP) that will manufacture fixed wing aircraft, aerostructures for commercial transport aircraft and helicopters for both military and commercial use. The current investment being quoted for the development of the Park as the centre of a smart city with all facilities is $ one billion. Anil Ambani is already in queue for two huge helicopter projects with the Russians and the French.
Reports suggest that even though the land has just been allotted and signed for, with the facilities still to be constructed, Anil Ambani is already looking to secure some lucrative contracts worth over Rs 25000 crores. These include surveillance helicopters, and Naval utility helicopters.
Significantly the land has been made available by the AP government in “close proximity of strategic establishments of the Indian Navy and Bhabha Atomic Research Centre (BARC).”Anil Ambani, speaking at a Andhra partnership meet at Visakhapatnam disclosed , that the initial investment outlay of Rs 5000 crores by Reliance will “represent the single-largest investment at one location anywhere in Andhra Pradesh.”
The shipyard will build different categories of naval vessels for not just Indian but also foreign navies, and will focus on the maintenance, refit and services of ships. Ambani estimates that the “Indian Navy will spend over Rs 3 lac crore over the next 15 years - or nearly Rs 20,000 crore per year - on acquisitions and fleet modernisation of submarines and aircraft carriers, over the next 15 years, creating a huge pipeline of opportunity for the proposed world class naval facility.”
In characteristic style Anil Ambani showered Andhra Chief Minister Chandrababu Naidu, who was present at the function, with compliments. And in remarks that did not go unnoticed at the meeting singled out the CM’s son, politician and businessman Nara Lokesh for special mention with, “And if my interaction with his son, Nara Lokesh, a 32-year-old with impeccable educational credentials, unparalleled political pedigree and a super bright mind, is anything to go by, the developmental legacy of NTR and Chandrababu Garu, is set to continue for a very long time.”
Ambani went on to say, “Many of you would be familiar with a movie-series called ‘Mission Impossible’ or MI as it is sometimes referred to. Today, we have our own economic version of MI, thanks to Prime Minister Narendra-bhai. And just like the blockbuster film series, these missions are a part of a continuing series that will catapult India to the next level of growth:
MI for Make in India
SI for Skilled and Start-up India
DI for digital India
CI for Clean India
and I hope many more I’s in the days to come!”
Anil Ambani promised, “Our proposed world class naval facility will play a critical role in complementing this mission and bringing it to fruition. In will further nation building and national security, not to mention the prime minister’s Make in India mission in the defence sector. The world class naval facility will also help translate Make in India into Make in Andhra Pradesh! And leapfrog the state to the top of the manufacturing revolution in India’s defence sector.” The Anil Ambani led Reliance group has expanded fast in the defence sector with Reliance Defence and Aerospace (RDA), Reliance Defence Technologies Pvt. Limited and Reliance Defence Systems Pvt. Limited. In an indication of his interest and resolve Anil Ambani beat contenders like the Mahindras to seal control of Pipavav Defence for taking his ambitions forward. Despite differences it is reported that the brothers are agreeable to leaving defence as a primary business for Anil Ambani who is racing ahead to expand the business with negotiations already on for helicopters and equipment for the Indian military. Interestingly the group is setting up a Smart City on 5000 acres focused on defence production and export. This will be named Dhirubhai Ambani Defence Park, after the siblings father.
Anil Ambani is hiring ex-military officers to head his defence companies. A former Air Force Wing Commander Rahul Dhingra was hired earlier. More recently Retired Vice Admiral H.S.Malhi has been appointed as the Group President and Chief Executive Officer of Reliance Defence Systems. "Malhi's expertise in strategic planning and execution, operational management, and joint ventures and partnerships will enable Reliance Defence Systems to realise its goal of creating India's foremost defence company, with an emphasis on the 'Make in India' programme initiated by the Prime Minister of India, thereby creating sustainable long term value for all stakeholders," a statement issued by the company earlier had said.
As The Citizen had reported last year Reliance, is looking at the Rs 60,000 crores P-75(I) projects of the Indian Navy for six conventional submarines. Malhi, after retiring from the Indian Navy, was the Chairman and Managing Director of Mazagon Dock Limited, Mumbai and hence brings in rich expertise and contacts into his new office. Significantly in Mazagon Dock he had overseen the commissioning of INS Shivalik, Indian Navy's first indigenously built stealth frigate. The second and third ships of Kolkata class destroyers were also launched during his tenure. The Indian Navy is the only defence service to have moved ahead in its indigenous production program, with both the Army and the Air Force lagging far behind.
There is nothing small or tentative about Anil Ambani’s entry into the defence sector. He hired known consultants from well known defence corporates like Lockheed Martin, went on to acquire the Pipavav company and shipyard in Gujarat, and is now busy bidding for defence licenses covering a wide expanse of weapons, ships, landing platforms and helicopters.
Anil Ambani has also announced an investment of an additional Rs 5000 crores in the Pipavav shipyard over the next few years to make it a one stop shop for all Indian Navy’s requirements including aircraft carriers, submarines and frigates. This comes after Pipavav signed an agreement with the Russians for medium refits and life certification of 877 EKM submarines in India.
In a whopping $3.5 billion deal Pipavav has been selected by the Russians to build frigates in what is being seen as the biggest warship project in the private sector. Reports quoting official sources stated that the public sector Cochin Shipyard was passed over in the process, with the Russians selecting Pipavav in Gujarat over the Cochin Shipyard in Kerala and Larsen and Toubro’s unit at Ennore. The final seal to this agreement is expected to be given by the two governments.
Pipavav Defence has also inked an agreement with a Singapore based company Augur Overseas Operation to manufacture defence aerostat and aeroships.Reliance has a 51 per cent share, and this is seen as a ‘visionary’ project as the aerostat ---part of the equipment for border surveillance---market is expected to rise substantially over the next decade.
Anil Ambani is a frequent travellers with Prime Minister Narendra Modi during his visits abroad, being part of the business delegations. The grapevine buzz now places him far ahead of his more successful brother Mukesh Ambani, insofar as political clout is concerned given his proximity to the PM and his fast expanding defence interests. He has been a vocal advocate of the Make in India program and started his journey upwards shortly after being nominated as one of the nine celebrities by the Prime Minister for his Clean India campaign last year. Others included Sachin Tendulkar, Priyanka Chopra.
Ambani has been taking care to respond to PM Modi’s initiatives, the more recent being his decision to give up cooking gas subsidies. While he joined a host of industrialists like Anand Mahindra, Gautam Adani and Mukesh Ambani he went a step further by directing his groups one lakh employees to do the same. This did create a stir as the comparison between the paid employee and the top baron was drawn pretty starkly in sections of the social media. But it placed Anil Ambani firmly in the media headlines.