BENGALURU: Larsen & Toubro (L&T) has terminated its contract for executing Corridors 2 and 4 of the Bengaluru Suburban Railway Project (BSRP), citing Rail Infrastructure Development Company (Karnataka) Ltd’s (K-RIDE) “failure” to provide sufficient encumbrance-free land for project execution. The move is expected to push the already delayed project even further as re-tendering will now be required.
According to a letter to K-RIDE’s managing director, accessed by TNIE, L&T stated that despite repeated assurances, K-RIDE had handed over only 8.28% of the encumbrance-free workfront since the Letter of Acceptance (LOA) was issued in August 2022. This limited handover, L&T said resulted in idle machinery, massive cost overruns and made it impossible to adhere to the original construction timelines.
Following the termination, L&T submitted a closure report and moved the Commercial Court in Bengaluru on July 29. The court granted an interim injunction restraining K-RIDE from invoking L&T’s bank guarantees. The contractor cited that without adequate land availability, continuing the project was unfeasible.
L&T has also sought a compensation of approximately Rs 500 crore for Corridor 2 as mentioned in the letter and it is also learnt that the company has demanded around Rs 150 crore for Corridor 4 as compensation.
The termination comes as a severe blow to BSRP, which has faced several delays since its sanction in October 2020. The sanctioned project originally had a six-year completion target. With L&T walking out, K-RIDE will now have to float fresh tenders for Corridors 2 and 4, a process that, according to sources, will take at least six months before work can resume.
The development is likely to push the project well beyond its original deadline. Industry experts point out that re-tendering will not only delay execution but could also escalate project costs significantly.
The managing director of K-RIDE was unavailable for comments.