An IL&FS Engineering and Construction Company and Gayatri Projects joint venture (JV) has won an arbitration claim worth Rs 914.3 crore for a Nagaland road project, the two companies said in a statement on Tuesday.
“Gayatri Projects is pleased to announce the award of an arbitration claim worth Rs 914.3 crore in favour of its JV with IL&FS Engineering and Construction company for the Nagaland Project,” Gayatri Projects said in its statement on Tuesday.
IL&FS in a separate statement further added, “After completion of the court process, the realised award amount shall be shared between the partners in proportion of the work done.”
Finalisation of the award is also expected to release bank guarantees given by the JV partners. “On finalisation of the award claims, bank guarantees by the JV partners worth Rs 240 crore will also be released,” Gayatri Projects said in its statement. In addition to the Rs 914.3 crore, the amount will also accrue an interest of 12 per cent per annum till realisation of payment is done.
The Nagaland road project was bagged by IL&FS-Gayatri JV on February 2011. The work involved two laning of Longleng-Changtongya Road, Mon-Tamlu-Merangkong Road, Phek-Pfutzero Road, and Zunheboto-Chakabama Road in Nagaland under Phase A of the Special Accelerated Road Development Programme for Northeast. The development work contract was valued at Rs 1,089.55 crore. The project later ran into arbitration over cost escalation issues. The project was awarded by the public works department.