Govt may stick to engineering-procurement-construction mode for Zojila

Zojila was conceptualised in 2013 as a BOT project that had strategic importance because of its proximity to both Pakistan and China.

Despite the focus on the build-operate-transfer (BOT) mode of road construction, the Union government is expected to stick to the engineering-procurement-construction (EPC) mode for the marquee Zojila project. The reason it is being treated as an exception is that it has a longer gestation period.

The government hopes to reduce this by pumping in its own funds.

“If the project is constructed in the EPC mode, getting land and other clearances is faster as the investment in the project is secured by the government. In case of Zojila, the project is already delayed by about six years and constructing it on the EPC mode would mean faster completion,” said an analyst.

It was conceptualised in 2013 as a BOT project that had strategic importance because of its proximity to both Pakistan and China.

“It is a strategically significant project and requires around seven years to be built but has been languishing for six years. It needs to executed on a priority. The construction time can be reduced with EPC,” said Vijay Chibber, former road secretary.

The overall reduction in construction time, on the EPC mode, will be about six months to a year.

Zojila first got the Cabinet approval in 2013 and has been bid out five times since then, one time there was no bidder and other times only one bidder emerged for the project.

The last time it was bid out in May 2017, four private players participated – Larsen & Toubro, IL&FS, Jaypee Infratech and Reliance Infra.

In June 2017, the contract was awarded to IL&FS Transportation Networks in August 2017 at a price of Rs 4,899 crore and a period of seven years to construct tunnel, with the goal of providing all-weather connectivity between the Kashmir valley and Ladakh.

In January 2018, IL&FS received the letter of acceptance (LoA)) from the National Highways and Infrastructure Development Corporation (NHIDCL), a wholly-owned subsidiary of the road ministry, for project construction.

The project was scrapped in March 2019 as the developer IL&FS went into financial difficulty.

Besides the Zojila tunnel project, IL&FS is battling some arbitration cases with the road ministry and the National Highways Authority of India (NHAI). The debt-laden company has even challenged some arbitration cases at higher courts over lower claim amount approved by the arbitration panel.

The Zojila pass is situated at an altitude of 11,578-ft on Srinagar-Kargil-Leh National Highway which remains closed during winters (December to April) due to heavy snowfall and avalanches cutting off Leh-Ladakh region from Kashmir. Once completed, Zojila would be country's longest road tunnel with strategic and socio-economic importance.

When IL&FS bagged the project, its civil construction cost was estimated Rs 4,899 crore while the total capital cost of the project is Rs 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 tunnel for four years.