You are here: Home » Companies » News
Business Standard

Gammon's Russian partner abandons Chennai Metro project

Vendors allege Mosmetrostroy defaulted on payment of about Rs 29 crore and its employees were absconding

BS Reporter  |  Chennai 

Chennai Vendors’ Association has alleged Mosmetrostroy, the Russian joint venture partner of Gammon India in the metro rail project for the city, has defaulted on payment of about Rs 29 crore.

The association, which used to supply material for the metro rail project to the Moscow-based company, also alleged that its employees were absconding, and work on the stretch on which the Russian construction major was engaged had stopped for the past 15 days.

“Seventy-two vendors were supplying material such as cement, machinery and electrical goods to the project. The company (Mosmetrostroy) had been delaying payment. Now, all 60 Russian employees of the company are absconding,” said R Mathialagan, vice-president, Chennai Vendors’ Association.

Sources in Chennai Metro Rail (CMRL) confirmed that work had indeed stopped on the stretch for the past 10 days and foreign nationals in the employ of Mosmetrostroy were no more in Chennai.

The Russian company, which has built more than 180 metro stations in Moscow since 1931, was working on a project in Chennai to build underground tunnels and stations.

CMRL sources said work had been restarted after a discussion with Gammon India. The entire stretch is expected to be completed by the end of 2016, and there is unlikely to be a delay. Neither Mosmetrostroy nor Gammon India officials were available for comment.

The vendors have also met CMRL officials for payment, who have suggested that if they can obtain a letter from Mosmetrostroy suggesting that CMRL should clear the dues, it could do so from the deposit of Rs 112 crore the Russian company made when entering the project. A representation has been made to the Russian consulate in Chennai to get in touch with Mosmetrostroy by the vendors.

According to CMRL, the primary contract for constructing underground tunnels and stations was awarded to Gammon India and it has to complete the project, whether with the Russian partner or not.

An official said: “The Indian employees who have been working with the Russian partners are still there and could finish the work.”

Mosmetrostroy was building tunnels and Gammon India, stations.

The project involves constructing seven underground stations at Government Estate (Secretariat), LIC building, Thousand Lights, Gemini, Teynampet, Chamiers Road and Saidapet, along with the twin bored-tunnels, covering a total distance of 8.7 km.

Vendors speculated the Russian company might have abandoned the project after their demand for more money was denied.

According to a Mosmetrostroy release in February 2011, the Consortium OJSC Mosmetrostroy-Gammon India was awarded two contracts for underground stations and tunnels by CMRL for Rs 1,947 crore.

These contracts are part of the five tender packages (UAA-01 to UAA-05) floated by the CMRL for designing and construction of tunnels covering a distance of 18 km and 19 underground stations.

The cost of materials has gone up since the contracts were awarded and Mosmetrostroy had asked for more payment for the work.

WHAT’S AILING THE PROJECT?

  • Sources in CMRL confirmed that work had stopped on the stretch for the past 10 days and foreign nationals in the employ of Mosmetrostroy were no more in Chennai
  • A representation has been made to the Russian consulate in Chennai to get in touch with Mosmetrostroy by the vendors
  • Gammon India has to complete the project, whether with the Russian partner or not, according to CMRL

First Published: Wed, May 20 2015. 00:37 IST
RECOMMENDED FOR YOU