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Alcock Ashdown Gujarat Ltd (AAGL), the state’s shipbuilding company, has secured green signal from the Gujarat Government for its 100 per cent equity stake sale and has appointed consultants for its valuation.
The proposal for disinvestment has been under consideration since July 2006 with the Government of Gujarat. The State Government had invited expressions of interest for appointing consultants in November last year.
“The Government has given approval for its 100 per cent equity stake sale in the company. A consultant has been appointed for doing the valuation, and within 20 weeks they shall submit the report,” a top company official told PTI.
Originally, a British owned company engaged in shipbuilding and ship repairs, Alcock Ashdown had went into liquidation, and was taken over by the Government of India in 1975 and subsequently acquired by the Government of Gujarat in 1994.
Alcock Ashdown has been rapped by the Comptroller and Auditor General for not safeguarding its financial interest, thereby exposing it to a probable loss of Rs 96.42 crore in execution of a contract bagged from the Indian Navy for constructing six survey vessels.
The company had bagged a contract for the construction of six survey vessels (Catamarans) for the Indian Navy from the Ministry of Defence at an aggregate price of Rs 698.91 crore in 2006, the CAG report stated.
As per the contract terms, the first vessel was to be delivered on April 6, 2009, while the remaining five vessels were to be delivered from July 6, 2009 to July 6, 2010.
The CAG in its report observed that the company accepted the price of Rs 109.89 crore per vessel for the project even though its own estimated cost of construction per vessel was Rs 115.87 crore.
As per the company’s own latest estimate, the cost of construction per vessel would be Rs 125.96 crore against the contract price of Rs 109.89 crore. Thus, the company was already exposed to the probable loss of Rs 96.42 crore, CAG report stated.
The company in an audit query admitted to CAG that uncertainty on the State Government’s disinvestment plan and non-availability of adequate financial assistance from banks had resulted in delay of execution of the contract.
The company has two shipbuilding yards one each in Bhavnagar and Chanch (Amreli district), respectively.
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