After the financially-stressed Infrastructure Leasing & Financial Services (IL&FS) took leave of the contract to build the crucial Zojila tunnel project in Jammu and Kashmir, the Union government is working to reissue the tender, reports Business Standard.
This will be the third time that Union Road Ministry's subsidiary, National Highways and Infrastructure Development Corporation (NHIDCL), will call for fresh bids for the 6,809-crore project.
IL&FS, a non-banking financial company with a debt of over Rs 91,000 crores, had won the contract in 2017 to build the country’s longest road tunnel on the Srinagar-Kargil-Leh national highway.
Running for a length of at 14.2 km the tunnel would be situated at an altitude of 11,578 feet. The tunnel, which is expected to take seven years to build, will provide all-weather connectivity between Srinagar, Kargil and Leh.
IL&FS, one of India’s top NBFCs that lent heavily to big infrastructure projects, defaulted on its loan repayments in September 2018. This default triggered a market-wide liquidity crisis in the Indian financial system.
Following the takeover, the government moved swiftly and replaced the company’s board with its nominees, including Uday Kotak, the government's banking crisis manager.
It was reported on 2 January (2019) that the debt-laden non-banking financial company (NBFC) major, IL&FS, had invited bids to sell its real estate assets to raise funds and trim its massive debt.