IL&FS crisis derails Rs 15,000 crore infra projects

Maharashtra Metro Rail Corporation, in December 2018, terminated the contract for construction of seven elevated metro stations and three at-grade stations in Reach-1 of Nagpur Metro Rail Project.

Published: 11th February 2019 08:09 AM  |   Last Updated: 11th February 2019 02:46 PM   |  A+A-

IL&FS

Infrastructure Leasing and Financial Services outstanding loans and investments to other group entities are much higher than the permissible regulatory caps (Photo| PTI)

Express News Service

NEW DELHI: The crisis wrought by Infrastructure Leasing & Financial Services Ltd (IL&FS) has stalled the progress of about half a dozen high profile infrastructure projects in the country to the tune of Rs 15,000 crore and fate of many more such projects are hanging in uncertainty.

Last week, when Delhi Metro Rail Corporation agreed to take over the management of Rs 1,055 crore Gurgaon Rapid Metro Rail, it was the latest project to be handed over to another authority post the IL&FS fiasco.

Ahead of that, GAIL India scrapped two projects, which it had awarded to IL&FS Engineering and Construction Company Ltd, a unit of the troubled IL&FS. The contracts worth Rs 270 crore were awarded only last year, and the 260-km pipeline projects were part of the 2,655-km natural gas pipeline-laying under Pradhan Mantri Urja Ganga, connecting Uttar Pradesh, Bihar, Jharkhand, West Bengal and Odisha.
The GAIL had set the end of 2019 as the deadline for the two stretches. However, lack of funds, manpower and sluggish progress had been dragging the project down, finally forcing the company to scrap the contracts.

The crisis has also jeopardised the fate of the prestigious and strategic Zoji La tunnel, intended at providing all-weather connectivity between Srinagar, Kargil and Leh in Jammu and Kashmir. The cost of the project was pegged at Rs 6,800 crore.

Following delays and considering the company’s current financial situation, the National Highways & Infrastructure Development Corporation Ltd decided to terminate the Zoji La tunnel contract awarded to IL&FS Group on January 15. The authority is likely to invite fresh bids for the tunnel project.

Even the Gujarat Metro Rail Corporation, on January 10, terminated the Rs 374.64 crore contract awarded to IL&FS Engineering & Construction, citing project delays. The same was awarded to J Kumar Infrastructure.

IL&FS Engineering & Construction has been building four stations and a 4.6-km viaduct for the Ahmedabad Metro. However, the company has stopped the work since September 2018, courtesy of the crisis.

Maharashtra Metro Rail Corporation, in December 2018, terminated the contract for construction of seven elevated metro stations and three at-grade stations in Reach-1 of Nagpur Metro Rail Project.

“Even by a conservative estimate, projects worth Rs 15,000 crore have been delayed. Here we are talking about the projects that are scrapped. If you take into account half-completed projects, the number would go up significantly. It will take another two-three months to decide on the fate of such projects,” a senior official in the Ministry of Corporate Affairs admitted.

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