Zojila: Modern day marvel contract to scam-hit IL&FS called off, NHIDL to initiate fresh bidding

JAMMU: Eight months after Prime Minister Narendra Modi said "Zojila tunnel is not a mere tunnel but a modern day marvel", the contract, for the ambitious project which envisaged ensuring an all weather connectivity to Ladakh region and reducing journey across one of the world’s most difficult passes from 3.5 hours to as little as 15 minutes, has been called off.

This is the second time since the cabinet approval of Rs 6,800 crore project by the Modi government in January 2018 that the Zojila contract has been cancelled. The central government owned National Highways & Infrastructure Development Corporation Ltd will not initiate a process of fresh bidding for the project.

The News Now in its edition dated October 5, 2018 had exclusively reported that with country’s major infrastructure firm IL&FS –which has the honours of constructing Chenani-Nashri tunnel -running into major trouble, perhaps the biggest corporate scam of recent years, two strategically important projects in Jammu and Kashmir could run into rough weather.

After months of speculations, on January 15, 2019, the IL&FS Transportation confirmed in a BSE filing in the following words: "the contract awarded for construction, operation and maintenance of 2-Lane Bi-Directional Zojila Tunnel awarded by NHIDCL in the state of Jammu & Kashmir has been terminated effective January 15, 2019”.

Through this contract, the company had to construct 14.15-km tunnel through the mountains of Zojila which would cut down the 3.5 hour long drive to 15 minutes. The NHIDL had earlier cancelled the bid of IRB Infrastructure and re-tendered the project in 2016 following which the IL&FS had emerged as the lowest bidder in 2017.

The IL&FS is embroiled in Rs 94,215.6 crore debt scam, following which the Centre in October last superseded the board of IL&FS and appointed new members to rescue the group.

The scam hit IL&FS which was taken over by a central government nominated board in October 2018 was engaged in two prestigious projects of national importance –Zojila Tunnel and Srinagar Sonamarg Tunnelway –which it had won through lowest bidding. The last meeting which IL&FS official, together with top executives of main executing agency, National Highways and Infrastructure Development Corporation Limited, had attended with Jammu and Kashmir government was on August 18 under the chairmanship of the then Governor NN Vohra.

The company is part of the crisis-hit IL&FS group which has defaulted on debt repayments due to financial mismanagement. The total debt of the group was pegged at Rs 94,215.6 crore as of October 8. The government in October superseded the board of IL&FS and appointed new members to rescue the group.

Earlier, the Modi Cabinet on January 3, 2018, had approved the Zojila tunnel project with Parallel Escape (Egress) tunnel between Baltal and Minamarg on the Srinagar-Leh section of NH-1A at a total cost of Rs 6,800 crore. The construction of the project was expected to complete in seven years.