Assam govt to terminate contract with IVRCL

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Guwahati water supply project off track

By:  Sandeep Sharma

GUWAHATI, March 4: Assam government is all set to terminate the contract with IVRCL Pvt Ltd from Japan International Cooperation Agency (JICA)-assisted South Central Guwahati Water Supply Project as the Hyderabad-based construction giant went bankrupt. Indicating this, reliable sources on Monday informed that the official order in this regard would come out within a day or two.

The JICA has already agreed to the government’s request of terminating the service of the IVRCL. Earlier, the Guwahati Jal Board, which is looking after the ongoing water projects in the city, had asked Guwahati Metropolitan Development Authority (GMDA) to float fresh tender for the pipeline works after the IVRCL went bankrupt.

This has further pushed the completion date for the water supply project in which IVRCL was conducting the pipe laying works by at least one year. “The entire process of floating the tender again and then waiting for new parties to apply for the tender, conducting the scrutiny of the prospective contractors and then making a selection will take at least a year’s time. It might take more too,” sources told The Hills Times.

The project was commissioned in 2012 and was supposed to be completed within 28 months, but had been missing deadlines ever since – in 2015 and then, December 2017. The last commissioning date was slated for October, 2019.

The IVRCL had completed about 67% of the pipe laying works so far with 800 km out of a total of 1,200 km already laid. The total area of pipeline network is 775 square km. The project that had a total budget of Rs 1,636.28 crore – Rs 1,363.28 crore loan from JICA and the rest Rs 273 crore from the state government – when completed will provide 191 million litres of potable water daily in south central Guwahati.

The National Company Law Tribunal (NCLT), Hyderabad had ordered the commencement of a corporate insolvency resolution process against IVRCL on February 23 vide an order – C P (IB) No 294/7/HDB/2017. The tribunal made the copy of the order ready for communication on March 3, 2018.

On March 3, all the assets of the company was handed over to the Interim Resolution Professionals (IRP) vide Section 18 (1) of the Insolvency and Bankruptcy Code, 2016 to look into speedy and proper repayment to the company’s corporate debtors.

The IVRCL was rendered bankrupt due to its inability to repay a loan amount of around Rs 600 crore to a public sector bank. “This was an unexpected development. When this company was awarded the contract, it was one of the best when it came to water supply projects. It was working on several other ongoing projects at that time. Not only will this project get affected, several other ongoing projects in different parts of the country will also get affected,” an official of the Guwahati Metropolitan Water & Sewage Board under the Guwahati Jal Board, said.

“We can, however, contain the damage to a certain extent if we can properly utilise our other contractors and speed up other works. The works for water intake point and construction of reservoir need to be done on war footing and be completed by this monsoon,” he said.

Besides IVRCL, other private and government construction agencies such as Gamon India Ltd, M/S IVRCL Infrastructure and Project Ltd, Viswa BRCCPL (Jevi), JWIL Renhill (Jevi), Zindal Show Ltd, Electro Steel Casting Ltd, APDCL and NJS Consultant Company Ltd were also involved in the South Central Guwahati Water Supply Project.

According to the website of the company, IVRCL has completed at least 18 water supply projects in Gujarat, Rajasthan, Tamil Nadu, Bihar, Kerala, Maharashtra, Telangana, Karnataka and Madhya Pradesh.

IVRCL was also working on the Trans Arunachal Highway project – the project for development of roads and highways of Arunachal Pradesh – in which it was widening the existing 2-lane national highway standard roads along with improvement and re-alignment works from Nechipu to Hoj, via Seppa, Khodaso and Saggalee of Arunachal Pradesh.

Besides South Central Guwahati, the JICA is also assisting on the North Guwahati water supply project that will provide 38 million litres daily (MLD) at North Guwahati while the Asian Development Bank is funding South Eastern water supply project that will supply 98 MLD water and the Jawaharlal Nehru Urban Renewal Mission is funding another West Guwahati water project that will supply 107 MLD water. All the projects are awaiting completion.

“There are four major parts of construction for the entire project which are 1) building intake wells in the Brahmaputra, 2) building of the water treatment plant, 2) reservoirs and 4) the outlet network. While 66% of the outlet network has already been completed and the primary reservoir has also been completed, 45% of the work on the treatment plant has been completed; the intake well’s work has started recently and is going on a war footing. To sum up almost 60% of the work is done,” the official said.

Out of 1,200 kms of the entire pipeline network in south central Guwahati, 800 km of pipe laying work has been completed so far. “We are trying to get partial commissioning of the project by the end of January. After the partial commissioning, we will keep on adding more houses as the work progresses,” the official said.

He added that additional houses will keep getting water connections as the pipeline laying work of the project progresses. In the initial phase, approximately 2,000 houses will be benefitted around the Pan Bazar and Fancy Bazar areas of the city. The GDD has faced severe criticism over its failure to complete the project.


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