L&T terminated contracts of suburban rail project illegally, says K-RIDE

The termination of two contracts for Corridor-2 and Corridor-4 of the Bengaluru Suburban Rail Project (BSRP) by Indian multinational conglomerate Larsen & Toubro is a clear violation of agreement conditions, said officials of K-RIDE, a joint venture between the government of Karnataka and the Ministry of Railways, on Saturday.

L&T had terminated the contract on July 31, added K-RIDE.

"L&T has made unreasonable demands of revising contract price within the contract period and converting EPC contract into an itemised Bill of Quantities (BOQ) contract, even though contract condition does not permit the same," stated a press release issued by K-RIDE on Saturday. 

According to the release, L&T had entered into two agreements to perform the work assigned to them in the Corridor-2 (Chikkabanavara to Benniganahalli) and Corridor-4 (Heelalige to Rajankunte) of the suburban railway project, added the release.

Originally, the scheduled completion time for Corridor-2 (C2) was 27 months, but was extended up to September 30, 2026. The agreement entered upon for Corridor-4 (C4) is valid till October 2026.

K-RIDE officials said all reasonable demands of L&T were addressed by them as per the provisions of the contract.

"The contract permits extension of the period for delay in availability of the land by K-RIDE. But L&T has opted to terminate the contract unilaterally and illegally," said the release.

The claims, said K-RIDE, had been referred to the Amicable Settlement Committee, as per the provision of the contract.

The work front available to L&T is about 84 per cent of the total corridor length of C2 and 17 km in C4, said the release.

"However, the progress achieved by L&T so far in C2 and C4 are not commensurate with the available work front, which exposes L&T's failures in carrying out the work, which is citing non-availability of work front as reason," added the press release.

According to K-RIDE, work was delayed because L&T failed to mobilise adequate resources and there was a delay in finalising designs. It also said that the project managers of L&T were frequently changed, affecting the progress of work.

There was no immediate reaction from L&T.