After scrapping ₹6,800-cr Zojila Tunnel, IL&FS road may stop 3 more projects

Our Bureau Mumbai | Updated on January 17, 2019


IL&FS Transportation (ITNL), the road development arm of debt-ridden IL&FS, has formally announced the termination of Zojila tunnel project in Jammu & Kashmir which the company has bagged after bidding much below the reserve price.

ITNL had emerged as the lowest bidder at ₹4,899 crore in July 2017. In January 2018, ITNL received Letter of Acceptance (LOA) from the National Highways & Infrastructure Development Corporation Limited (NHIDCL) for development of the project with the construction period set for seven years.

There was no project advance pay-out from NHIDCL as it was to be taken forward on a purely government funded basis.

“NHIDCL had issued a termination notice in November 2018, after which it the final termination notice on Thursday. It had also received a letter from ITNL a few days ago,” sources in the know told BusinessLine.

ITNL has implemented and bagged several Highway projects in the State that include building tunnels, which could be constructed only during the summers, etc.

While the works on the project started last year, they were soon disrupted as the company, along with its parent IL&FS, ran into troubles with the Centre having to overtake the control of the conglomerate.

The total cost of the project, according to Ministry of Road Transport & Highways is ₹6,808 crore, which includes the cost towards land acquisition, resettlement and rehabilitation and other pre-construction activities as well as maintenance and operation cost of the tunnel for four years. Zojila tunnel is a strategically important project — it aims at building a 14-km long, two-lane, bi-directional tunnel with a parallel 14 km long egress tunnel to establish year-round connectivity between Srinagar and the Leh-Ladakh region. The project was considered one of the most complicated because of harsh weather conditions and difficult terrain.

With ITNL terminating the project, the government will have to announce a new tender. This will be the sixth time the Centre is inviting bids for this project.

More terminations


The company has received termination notices for two highway projects in Maharashtra — Amravati Chikhli Expressway Limited and Fagne Songadh Expressway Limited and Srinagar Sonmarg Tunnelway Limited — another under construction tunnel on Srinagar Sonamarg Gumri section of NH-1 in J&K, sources noted.

Published on January 17, 2019

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