Tata Projects consortium served termination notice over 'intolerable' delay

Move over 'inordinate delay' in executing crucial stretch of Western DFC

The Dedicated Freight Corridor Corporation of India (DFCCIL) has issued termination notice to Tata Projects-partnered consortium over “intolerable” delays in the execution of a crucial stretch of the Western Dedicated Freight Corridor (DFC). The section is a part of a 422-kilometre contract estimated at Rs 4,328 crore.

The Express Freight Consortium, which comprises Japanese infrastructure firm Mitsui & Co., state-owned Ircon International, and Tata Projects, has been served a termination notice over the much-delayed Jawaharlal Nehru Port Trust (JNPT)-connecting stretch of the Western DFC, with ultimatums issued for stretches delayed, multiple executives in the know confirmed to Business Standard.

Mitsui is the consortium lead, while Tata Projects is the project execution partner for the port-connecting stretch.

“There were multiple issues with their project management and execution. The delays eventually became intolerable and we had to serve them a termination notice for the Vaitarna-JNPT section (111 kilometres) on November 3,” said a senior executive.

Additionally, a “notice to correct” has also been served on the consortium over the stretch between Sachin and Makarpura in Gujarat.

While the consortium was awarded the bigger contract, Tata Projects was solely responsible for the execution of the Vaitarna-JNPT stretch.

Sources indicated that the consortium is likely to take legal recourse against the termination. However, there is no official confirmation on it yet. A senior government official aware of the development said the company has only completed close to 35 per cent of work on that stretch, with nearly 65-70 per cent progress on the Sachin-Makarpura stretch. The executive and official quoted above said the company might still be able to save face, but more action will follow if it does not step up.

Queries emailed to Ircon, Mitsui, Tata Projects remained unanswered, while the Ministry of Railways redirected them to DFCCIL. DFCCIL did not respond until the time of going to press.

The consortium was mandated to complete the major Vaitarna-JNPT DFC by March 2021, but has seen several delays. The current completion timeline for the section is December 2024, but the fiasco will now delay it for a significant period of time since the project, after a legal battle, will have to be re-tendered.

According to a report, Tata Projects said delays were on account of land acquisition, which were beyond its control.

One of the senior executives quoted earlier said it is not a valid justification since the company’s performance on land acquired was subpar.
 

This paper had previously reported that the encroachment issues by squatters and a National Green Tribunal order banning earthwork without environmental clearance for the project had been delaying it inordinately. There are five patches of land totalling 1.73 kilometres, where land acquisition is yet to be completed.

Moreover, pressure is mounting on government agencies to finish the corridor at the earliest. Several government officials and port-related executives confirmed that the corridor not reaching JNPT is a cause for concern.

“Business is moving away from JNPT because there’s no clarity on DFC connectivity yet. Moreover, private operators of port terminals had made their bids projecting traffic growth based on the corridor, and they’re concerned about unending delays,” informed a source.

The DFC is expected to be a game changer for the movement of cargo from ports, offering close to thrice the average speed of freight trains on passenger rail tracks.

Racing against time

• Tata Projects was the executing company for the Vaitarna-Jawaharlal Nehru Port (JNPT) section, as part of the consortium’s agreement
• The Western DFC’s completion may get pushed beyond December 2024, marking a significant delay
• A ‘notice to correct’ has also been served on the consortium, as an ultimatum to speed up work on the other sections 
• The corridor’s delayed connectivity to state-owned JNPT is a cause of significant concern for the industry as well as the Centre