NEW DELHI: The private contractor involved in construction of the partially collapsed tunnel in Uttarakhand is also locked in a dispute over failure to complete a top secret defence project for the Indian Navy within deadline.
Last year, the ministry of defence removed Navayuga Engineering Company Ltd as the contractor to build a base, codenamed “Project Varsha” in the eastern part of the country, after repeated delays in meeting work deadlines marred the ambitious plan.
While Navayuga is locked in an ongoing arbitration demanding compensation after the ministry terminated the contract, it had approached the Delhi High Court last year seeking to stop authorities from invoking or encashing seven bank guarantees it had paid after bagging the project. Repeated queries sent to the company spokesperson did not elicit any response.
The HC order discloses that the contract between Navayuga and Navy was for the construction of the Inner and Outer Harbour for “Project Varsha” which is a highly confidential defence project of national and strategic importance to the Indian Navy located on the East Coast of India.
Due to the highly sensitive nature of the project, a confidential and limited survey was allowed at the time of the tender and subsequently the firm was awarded the contract in 2017 with a deadline to finish the project in 42 months, till August 18, 2021, which stood extended upto March 5, 2022 later.
Justifying its move to stop funds to the project, the Navy highlighted before HC that the company was in complete defiance since 2018 and showed no seriousness to complete the work which may have been at the behest of third parties and raised serious concerns.
On its part Navayug told court that it is a well-known industry practice that marine activities such as dredging are carried out in the `Fair-Weather Season’ — the period without monsoon. For the East Coast of India, the Fair-Weather Season generally falls between October and April, post which the monsoon commences. Due to the delay in start of work – since the contract was finally awarded only in October 2017, the petitioner lost the entire First Fair-Weather Season, which had a cascading effect on the completion of the entire project within the given time frame.
It also cited Covid-19 pandemic situation that led to extension of the deadline by the Navy. In addition, Navayuga produced a 2021 report by a professor of IIT Madras and other experts to show that the work couldn’t be executed within the timeline provided in the contract, urging HC to restrain the government from encashing seven bank guarantees furnished by the petitioner at the time of start of work.
Rebutting the claim, the ministry clarified that in 2015 a report was prepared by IIT Madras on the basis of proof of check of Project Varsha and the reports were submitted by two professors. But the 2021 report was independently prepared by a third professor engaged by the company and is a private document, not the report of IIT Madras as an institution which still stands by its 2015 report.
In its order, HC had asked the ministry to give 15 days prior notice before taking any decision on bank guarantees. Since then the matter is being heard in arbitration.
Last year, the ministry of defence removed Navayuga Engineering Company Ltd as the contractor to build a base, codenamed “Project Varsha” in the eastern part of the country, after repeated delays in meeting work deadlines marred the ambitious plan.
While Navayuga is locked in an ongoing arbitration demanding compensation after the ministry terminated the contract, it had approached the Delhi High Court last year seeking to stop authorities from invoking or encashing seven bank guarantees it had paid after bagging the project. Repeated queries sent to the company spokesperson did not elicit any response.
The HC order discloses that the contract between Navayuga and Navy was for the construction of the Inner and Outer Harbour for “Project Varsha” which is a highly confidential defence project of national and strategic importance to the Indian Navy located on the East Coast of India.
Due to the highly sensitive nature of the project, a confidential and limited survey was allowed at the time of the tender and subsequently the firm was awarded the contract in 2017 with a deadline to finish the project in 42 months, till August 18, 2021, which stood extended upto March 5, 2022 later.
Justifying its move to stop funds to the project, the Navy highlighted before HC that the company was in complete defiance since 2018 and showed no seriousness to complete the work which may have been at the behest of third parties and raised serious concerns.
On its part Navayug told court that it is a well-known industry practice that marine activities such as dredging are carried out in the `Fair-Weather Season’ — the period without monsoon. For the East Coast of India, the Fair-Weather Season generally falls between October and April, post which the monsoon commences. Due to the delay in start of work – since the contract was finally awarded only in October 2017, the petitioner lost the entire First Fair-Weather Season, which had a cascading effect on the completion of the entire project within the given time frame.
It also cited Covid-19 pandemic situation that led to extension of the deadline by the Navy. In addition, Navayuga produced a 2021 report by a professor of IIT Madras and other experts to show that the work couldn’t be executed within the timeline provided in the contract, urging HC to restrain the government from encashing seven bank guarantees furnished by the petitioner at the time of start of work.
Rebutting the claim, the ministry clarified that in 2015 a report was prepared by IIT Madras on the basis of proof of check of Project Varsha and the reports were submitted by two professors. But the 2021 report was independently prepared by a third professor engaged by the company and is a private document, not the report of IIT Madras as an institution which still stands by its 2015 report.
In its order, HC had asked the ministry to give 15 days prior notice before taking any decision on bank guarantees. Since then the matter is being heard in arbitration.
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