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IL&FS Turmoil Reaches PMO: Sub-Contractors Stuck In Stalled Road Projects Demand That Dues Worth Rs 2,000 Crore Be Cleared
The IL&FS office (Photo by Arijit Sen/Hindustan Times via Getty Images)
In the latest flare-up in the Infrastructure Leasing & Financial Services (IL&FS) crisis, contractors linked to five flagship road projects have communicated a letter to IL&FS chairman Uday Kotak and the Prime Minister’s Office (PMO) requesting the clearing of dues in excess of Rs 2,000 crores pending against IL & FS subsidiaries, DNA has reported.
The ten construction companies whose dues are pending claim that they are now close to collapse due to non-payment of the sums owed by IL&FS Engineering and Construction Ltd (IECL) and IL&FS Transportation Network Ltd (ITNL).
The problems have arisen as the Kiratpur-Nerh Chowk Expressway, Amravati-Chikhli Expresssway, Z-Morah Tunnel, Chenani-Nashri Tunnel have all been suspended before completion.
"These projects were under execution at various stages of completion by these contractors. It is understood that a gross amount of Rs 2321.02 crores is due to be paid by ITNL against invoices already raised for works completed as well as certain claims raised by them within the provisions of contract agreements," the letter stated.
The contractors are unable to move out their equipment and plants from these construction projects as the projects are only suspended, and not finally terminated.
These construction companies contend that they are unable to pay salaries of their employees at these work sites and that they are also under pressure to repay loans taken from NBFCs and banks on the basis of ITNL and IECC guarantees of project execution.
Banks and financial institutions have been restrained from setting off any of these claims against IL&FS by 15 October 2018 order of the National Company Law Appellate Tribunal (NCLAT).
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