IL&FS gets Indian Government approval to restart Bihar road project

Infrastructure Leasing & Financial Services (IL&FS) Engineering and Construction Company has secured approval from the Indian Union Road Transport Ministry to restart a highway project in Bihar.

The government’s approval provides crucial support for the IL&FS and its group companies as they face severe liquidity crisis.

In a regulatory filing, the company stated: “IL&FS Engineering and Construction Company Ltd has received approval from Ministry of Road Transport and Highways (MoRTH) on 14 June 2019, for revival/restart of the road project, which was previously referred for amicable foreclosure by the competent authority.”

IL&FS said taking into consideration the changed scenario, the company has decided against the foreclosure and had sought permission from the ministry to complete the project.

Under the project, IL&FS will be responsible for rehabilitating and developing the Birpur-Bihpur Section of NH-106 in Bihar under Phase-l of National Highways Interconnectivity Improvement Projects (NHIIP).

Further, the company will upgrade the road to two lanes in each direction with paved shoulders configuration and strengthen up to 106km of the Birpur-Bihpur section of the NH-106.

IL&FS Engineering and Construction Company stated that the work on the project is expected to begin within 15 days from the receipt of the ministry’s approval.

Previously, the road construction firm informed the BSE Exchange that it signed a settlement agreement with the National Highways Authority of India (NHAI) against the arbitration award in relation to two of its road projects.

The arbitration settlement and approvals follow a number of project terminations of IL&FS Engineering and Construction Company.

Gujarat Metro Rail and Jharkhand Bijli Vitran Nigam scrapped contracts due to slow progress. Earlier, Rail Vikas Nigam and Maharashtra Metro Rail cancelled the contract for the same reasons.