K-RIDE encashes L&T's bank guarantees over contract termination

Bengaluru: K-RIDE on Sunday said it had invoked and encashed Rs 57 crore from two performance bank guarantees submitted by L&T Ltd after the company unilaterally terminated civil contracts for corridors 2 and 4 of the Bengaluru Suburban Railway Project (BSRP). 

The move came after the arbitration tribunal rejected L&T's request for an injunction against the invocation of the bank guarantees. 

Railway Infrastructure Development Company Karnataka (K-RIDE) said the tribunal's decision upheld its stand in undertaking civil works on two corridors after L&T defaulted and unilaterally terminated the agreements, not as per the terms and conditions of the contracts.  

After contract termination, L&T had obtained a stay order from a commercial court against encashment of the bank guarantees. It also invoked the arbitration clause in the agreement. 

An arbitration tribunal consisting of retired Supreme Court and high court judges was constituted to look into L&T's claims and K-RIDE's counter-claims. The commercial court later referred all matters to the tribunal, K-RIDE said. 

L&T alleged that K-RDIE's failure to provide land, shift utilities and frequent changes in project scope led it to terminate the contract in July 2025. 

K-RIDE has floated fresh tenders for Corridor 2 (Baiyappanahalli-Chikkabanavara, Mallige Line) and plans to re-tender Corridor 4 (Heelalige-Rajanukunte, Kanaka Line). 

The BSRP's deadline has been revised to March 2030.