Though the government has put Zojila tunnel construction contract for rebid, the National Highways & Infrastructure Development Corporation Ltd (NHIDCL) is yet to get the bank guarantee amount from IL&FS Transportation Networks Ltd. Secondly, the National Highways Authority of India (NHAI) is yet to take back road projects from the crisis-laden group.
On April 22, NHIDCL, NHAI, and the Ministry of Road Transport & Highways officials held a meeting with the representatives of IL&FS Transportation Networks. During this meeting, it was discussed that IL&FS would move National Company Law Appellate Tribunal (NCLAT) to allow encashment of bank guarantees submitted as performance security for the Zojila Tunnel project.
In case, there is a failure in payment of this bank guarantee of around Rs 122 crore, NHIDCL will recover the amount from the payment it is supposed to make to IL&FS Transportation Networks for Z Morh Tunnel project in Jammu & Kashmir.
IL&FS spokesperson confirmed that the bank guarantee is yet to be paid to the government.
The debt-laden group is to receive payment from NHIDCL to hand over the Z Morh Tunnel project. As per the meeting held, NHIDCL "would pay an amount limited to the value of work done as full and final settlement." The valuation is yet to be arrived at.
This tunnel is part of the government's larger plan for all-weather connectivity on the roads of Jammu-Srinagar-Kargil-Leh. Z Morh is a 6.5 km long tunnel between Gagangir and Sonmarg. This tunnel is nearly half completed with a deadline to finish the work in 2020. The work had commenced in May 2015 and finished half way in July 2018.
Similar to Zojila Tunnel project, this tunnel project in Jammu & Kashmir too would eventually go for rebidding to complete the pending work.
Like Zojila Tunnel project's bank guarantee issue, even Patna-Gaya-Dobhi project's advance payment of bank guarantee is yet to be recovered by NHAI. The IL&FS Engineering and Construction will be moving NCLAT for disbursement of this Rs 60.29 crore too. If the amount could not be paid, NHAI will recover it from IL&FS Group's other projects.
In the weeks to come, NHAI and IL&FS Transportation Networks would discuss the broad framework for amicable settlement of Khed-Sinnar, Barwa Adda-Panagarh, Jorabat-Shillong, Chenani-Nashri and Balasore-Kharagpur road projects. The balance work of all these road projects will be completed by NHAI through other developers.
Of all these projects, IL&FS spokesperson shared with DNA Money that four of the road assets are yet to be handed back to the government and the process for the same is underway.