A&N Admin refuses Cochin Shipyard vessels due to delivery delay

Cochin Shipyard Ltd has been left with two passenger-cargo vessels that were built for the Andaman and Nicobar Administration, following the Union Territory’s decision to not accept delivery of the ships. The vessels were constructed for Rs819.22 crores under the Indian government’s ‘Make in India’ program. The shift in travel preferences among the island’s residents led to the decision. Cochin Shipyard announced during its first quarter FY24 results that the delivery dates for the ships had expired or were nearing expiration. The shipbuilder has agreed to the customer’s request to reallocate the vessels to other potential buyers, with limited progress made. The company has already accounted for liquidated damages up to April 2023 and October 2023 as per the contract, and will not recognize further damages beyond these dates.

The Andaman and Nicobar island people, who previously relied on water transport, have increasingly switched to air travel, thanks to cheaper air tickets made available through government schemes. This change has drastically shortened travel times, as air travel takes only a few hours, compared to the two to three days required for a journey by ship.

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