L&T terminates Bengaluru suburban rail contract, demands Rs 505 cr

Bengaluru: In a major setback to the Bengaluru Suburban Railway Project (BSRP), L&T Ltd has terminated its contract to build the Mallige Line and demanded Rs 505 crore. 

Of the four corridors under the 149-km project, only on the 25.01-km Mallige Line has seen construction while utility shifting is underway on the Kanaka Line. L&T is the contractor for both. 

The company halted work on the Mallige Line in March this year. 

In a legal notice dated July 29, L&T said most of the railway land should have been handed over within four months of the Letter of Acceptance (LoA) and most private land within eight months. 

Even nine months after the LoA, only 2.1 km of the workfront, or 8.28% of the total length, was made available, it said. 

"Evidently, all of KRIDE's representations were false, made with the sole intention of inducing and deceiving our client to execute the contract," the notice reads. 

L&T said it suffered "massive losses" as its resources remained "idle", and terminated the contract on July 28. 

It noted that even 22 months after the LoA was issued, only 12.83 km or 49.44% of the workfront was made available to the company, that, too, in "unworkable fragmented stretches". 

"...there are several stretches of the workfront where private lands are yet to be acquired, encroachments into railway land are yet to be removed, utilities yet to be removed, etc." 

The company demanded that K-RIDE release its performance bank guarantee of Rs 25.79 crore, mobilisation guarantee of Rs 9.47 crore, and security guarantee of Rs 42.99 crore. It also demanded 505.89 crore towards claims under various heads. 

On July 30, the Commercial Court, Bengaluru, granted an ex parte injunction restraining K-RIDE from invoking the bank guarantees. 

L&T warned that violations of the court's directions "shall have serious consequences". 

Minister of State for Railways V Somanna said he was unaware why L&T had terminated the contract, but insisted there were no issues from the railways' side. 

"We've cooperated with them (K-RIDE) in all possible ways and provided all the railway land. Only private land remains to be acquired," he told DH.

Somanna said he had written to the Niti Aayog, asking to transfer the project to the railways. 

Infrastructure Development Minister MB Patil and K-RIDE Managing Director Manjula N did not respond to phone calls seeking comment.