GMRC terminates Ahmedabad Metro civil work contract with IL&FS

Ahmedabad (Urban Transport News): The Gujarat Metro Rail Corporation (GMRC) Limited terminated the contract awarded to IL&FS Engineering & Construction due to project delays. After issuing the termination order on Thursday, the same work has been awarded to J Kumar Infrastructure by the GMRC.

The contract worth Rs.374.64 crores covering construction of four stations including laying 4.6 km viaduct for the Ahmedabad metro rail project. The IL&FS Engineering & Construction has stopped the work since last year September 2018 due to financial constraints at the parent group.

The Gujarat Metro Rail Corporation has also decided to forfeit the bank guarantee submitted by the IL&FS group company while receiving the letter of award (LOA) of the contract.

After defaulting in debt payment, the Board of IL&FS group was dissolved by the Central Government and now the company is being run by a government-nominated board of directors since August 2018. According to sources, the IL&FS group and its 348 subsidiaries have debt over Rs 94,000 crores of the lenders.

The GMRC in its statement said that they had given a number of notices to the IL&FS group to finish the work by the deadline i.e. March 2018 but they were not able to complete the work as per the schedule.

"We have terminated the contract of IL&FS Engineering & Construction. They were to build four stations and a 4.6-km viaduct for the Ahmedabad Metro at a cost of Rs 374.64 crore. The company was served numerous notices since October 2017 for not meeting the deadlines and by end-September 2018 the contractor stopped the work unilaterally. A final show cause notice was given in November 2018 and today we decided to terminate the contract," said in an official statement issued by the GMRC.

GMRC further said that the corporation has awarded the balance work to J Kumar Infrastructure and has also started to en-cash the bank guarantee of IL&FS as the company had neither performed satisfactorily in accordance with the terms and conditions of the contract and nor was in a position to continue the work, therefore contract termination.