Terminated contracts: NHAI gives firms chance to explain case, skip debarment

At least 20 projects of private firms were terminated between 2014 and 2016

By: Express News Service | New Delhi | Published:November 4, 2017 4:50 am
highway, highway projects, NHAI, NHAI projects, National Highways Authority of India, Larsen and Toubro, Essel Infra Projects, business news, Indian express news As per tender conditions, these companies stood to be debarred from bidding for new projects of the NHAI for next five years.

The National Highways Authority of India on Friday gave construction companies, whose contracts were terminated in the past three years, a chance to represent their cases and not get debarred.

At least 20 highway projects being executed by private companies were terminated between 2014 and 2016 for various reasons, mainly non-performance leading to delays. As per tender conditions, these companies stood to be debarred from bidding for new projects of the NHAI for next five years.

However, the new move by NHAI gives an opportunity to the companies, including engineering majors like Larsen and Toubro, Essel Infra Projects, and Hindustan Construction Company, among others, a chance to present their cases before taking a final decision to whether or not to finally debar them. The NHA review is slated for November 6. NHAI chairman Deepak Kumar said that a decision will be taken by November 7. “These projects had been terminated for various reasons and it is part of the condition to debar the companies. We are asking them to furnish their representation as to what they have to say, whether there is anything they would like to bring to our notice etc before taking a final call on them,” Kumar told The Indian Express.

These projects include various modes, like PPP, Build Operate Transfer and others. According to officials, reasons for termination were varied, and there were projects where contractors had blamed NHAI for the delays. Many had gone to court following termination in the past.

In a statement on Friday, Larsen and Toubro said that termination of their contract “could not be termed a concessionaire event of default.”

“L&T IDPL, a subsidiary of L&T, terminated a Concession for the Pimpalgaon Nashik Gonde Project due to Force Majeure events arising from Law & Order issues as per provisions of the Concession Agreement, after completing the Project. In our opinion the termination cannot be treated as a Concessionaire event of Default,” the company said. Sources said that with several construction majors facing debarment, this was the government’s way of giving them a sliver of a lifeline because the remaining highway projects would require large private participation. With the government’s highway construction target at 40 km per day and currently in the range of around 25 km per day, the pace of work without private participation cannot be achieved with a bouquet of construction majors kept out of bidding for new projects, sources said.

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