IVRCL Ltd's officials are optimistic that the company would pull through with a bailout

[Editor: The scrip of IVRCL Ltd reacted to this news and came down to Rs.15.01 on last Frinday. But this is a very small project of Rs.164 crore, in its order book of more than Rs.22, 500-plus crore. The company is currently undergoing CDR scheme and hence we can look forward for some easing of working capital requirements and flexible interest payment options]

Thursday , April 24 , 2014: The cash-strapped builders of the 2.2km Vivekananda Road flyover have sought a bailout from the government, landing the long-delayed project to link Girish Park with Howrah bridge in tricky territory.

Sources said IVRCL, the company contracted by the Calcutta Metropolitan Development Authority (CMDA) to build the flyover, has told the government that it was in a difficult position to complete the project that is already running 42 months behind schedule with only 69 per cent of the work done so far.

It has sought “compensation” or additional allocation of funds in the budget because of cost overruns.

IVRCL was awarded the contract on February 24, 2009, with an 18-month deadline and a budget of Rs.164 crore. But 60 months later, almost one-third of the work remains incomplete.

The sources said executing agency CMDA was to be partly blamed for the delays because it had allegedly done little or no monitoring of the work.

The Hyderabad-headquartered company has recently written to the CMDA expressing its difficulty in completing the remaining portion of the project without raising the budget. IVRCL admitted in the letter written about 45 days ago that it doesn’t have the money to buy material.

The CMDA has yet to reply to the request, though an official said “it will go by the contract agreement signed in 2009”.

The flyover has been facing hurdles since work began in December 2009. Sources said the design had to be changed and then several residents went to court seeking a stay order when they found that the flyover would be inches away from their homes.

Besides, construction carried on in fits and starts since permission to block the road on which it’s being built never came on time.

About 22 underground utility lines at 35 places between Girish Park and Posta had slowed down the pace of work. “We had to change the location of the piers more than 15 times as there were utility lines beneath the surface,” a source said.

An engineer said: “In the first 18 months, we got only 23 per cent of the land. We have not been able to work more than six hours a day. Construction starts around 11pm and ends by 5am.”

IVRCL officials were optimistic that the company would pull through with a bailout.

“We have not stopped work. We are doing whatever little we can but it will be difficult to sustain the work without a hike. We have told the CMDA about our problems,” a company official said.

The flyover will have two arms with the main 1.6km flank linking Girish Park with Howrah bridge. A 600-metre arm will start at the Posta crossing and move towards Nimtala Ghat Street.

Having overshot the revised deadline of March 31, 2014, after four extensions, the company has requested the CMDA to set March 31 next year as the new cut-off to complete and hand over the flyover.

That looks unlikely since the contract gives no room for a budget hike.

IVRCL did not use the phrase cost escalation in the letter but sought a “compensation”. The company is currently undergoing a debt-restructuring programme. “Many of our clients defaulted in payment. Besides, the overall economic situation hurt our company. At present, we are in poor financial health,” said an official.

IVRCL will have to buy about 2,500 tonne of high-tension steel for the remaining work, an impossible situation given its financial health.

The official said work has been progressing at “very slow pace” over the past six months. “Barely 3 per cent of work was completed.”

From below, the flyover currently looks like an overhead shed on certain stretches of Vivekananda Road.

Near the Ganesh Talkies crossing, a steel frame across the road looks more a gate rather than a flyover pier while only two spots for building piers are being cordoned off near Posta Bazar.

“The steel fabrication is being done in some places, piling at the Posta end is on,” the engineer said.

Vivekananda Road and adjoining areas had endured traffic snarls for the past four-and-a-half years because of the incomplete project — moving at a pace that could put a smile on a snail’s face. Many spots where piers were to be built had been blocked for years on end.

“The trucks take up two lanes, half of the road is blocked. It takes about 30 minutes to cross the 1km stretch from Malapara to the Girish Park crossing,” said Piyush Rastogi, a jewellery trader and resident of the area.

Courtesy: The Telegraph