The crisis-hit IL&FS Group has pulled out of Phase-I of the Ahmedabad Metro project. IL&FS Engineering, which is one of the subsidiaries of the company, had won a contract worth an estimated Rs 370-crore contract to construct viaduct on the second priority stretch on the North-South corridor which was expected to be commissioned by April 2019, reports The New Indian Express.
IL&FS was awarded the Letter of Acceptance (LoA) for the construction of the 4.62 kilometre- long elevated stretch from Gyaspur depot’s interface point to the Shreyas metro station on the 17.23-km North-South corridor of the Ahmedabad Metro making it the first construction contract awarded for the corridor.
IL&FS Group is running out of cash and owes Rs 53,000 crore to other banks. Them pulling out from an Rs 370-crore project signifies a more profound financial crisis than expected in the conglomerate that primarily funds infrastructure projects in the country.
The Ahmedabad Metro is not the only projected to be affected by the crisis as IL&FS Group holds a stake in several others like the Gujarat government’s ambitious GIFT City project in Gandhinagar.
“IL&FS Engineering was given the work of building the viaduct. About 70 per cent of the work was finished. In between, the company went through a restructuring process. They had stopped work at the metro site, and a notice was sent to them that said that if you do not start work, then your contract will not be renewed. They gave a reply about 8-10 days ago, and it appears they will not be able to restart the work,” said a senior official from Metro-link Express for Gandhinagar and Ahmedabad (MEGA)