Centre says no to equity partner in INS Viraat

Visakhapatnam: The efforts of the state government to turn Indian Navy’s mighty aircraft carrier INS Viraat into a maritime museum and a floating hotel have hit an obstacle with the Ministry of Defence (MoD) turning down the proposal. Andhra Pradesh government is awaiting a response from the Centre for a 50 per cent equity participation in the approximately Rs 1,000 crore project.

The MoD communicated to the state government that it cannot be an equity partner to the project. The state tourism department is also not in a position to bear the expenditure of Rs 1,000 crore. State government had earlier decided to move ahead on the INS Viraat project if the Centre agrees to be an equity partner. The Centre had communicated its decision to not to be equity partner last December, it came to light only recently.

“Andhra Pradesh Government has requested 50 per cent equity participation by the MoD in their proposed Special Purpose Vehicle (SPV) for the proposal of conversion of INS Viraat as an Aircraft Museum including tourist and hospitality components on a commercial basis.  The proposal was not accepted by the Ministry of Defence and the same was communicated to Government of Andhra Pradesh on December 12, 2016,” Union minister of state for defence, Subhash Bhamre said in a written reply to YSRC Rajya Sabha member V. Vijaysai Reddy on Tuesday.

The state government had forwarded the proposal to MoD in October last year. After a bad experience with the Maharashtra government over operating India’s first aircraft carrier, INS Vikrant as a maritime museum, the Indian Navy had decided to tread cautiously over appeals from various state governments to get India’s second aircraft carrier, INS Viraat to convert it into a museum. Apart from Andhra Pradesh, Karnataka and Goa also asked the MoD for INS Viraat to make it a museum.

While the Maharashtra government evinced interest in docking INS Vikrant that was decommissioned in 1997 and operate it as a museum, it backed off because a suitable partner could not be found to operate it.

INS Vikrant finally went to the scrap yard due to the inability of the Maharashtra government. Maharashtra government also informed the Bombay High Court which was hearing a PIL on scrapping INS Vikrant, and went on record that converting the ship into a maritime museum was not economically viable as it would incur a huge expenditure on maintenance and repairs.  

Indian Navy wanted a clear road map from state governments vying to get INS Viraat after which Andhra Pradesh government had appointed CRISIL to prepare a concept plan to make the aircraft carrier a  museum and also a hotel. After the cost estimation the state government had looked at the Centre for its help to take the project forward.