KMRC to pay Rs.257 Cr to an Infra Co., for delaying the project

An infrastructure company has asked for Rs 257 crore in compensation from the railways for being kept waiting over three years to start work on a stretch of the East-West Metro mired in litigation and red tape.

Afcons, the infrastructure arm of Shapoorji Pallonji, won’t be able to start work between Central station and Howrah Maidan until the alignment of the tracks through the Hooghly is finalised. The process has been delayed despite a litigated two-acre plot off Central Avenue being cleared for acquisition by Calcutta High Court last March.

“Afcons has been unable to start work for 38 months because of the unavailability of a final route alignment and has written to us, seeking compensation of Rs 257 crore,” Hemant Kumar Sharma, managing director of the Kolkata Metro Rail Corporation (KMRC).

This is not the first time an infrastructure company has complained about the unavailability of land for projects but Afcons is the first to demand compensation for the loss of mandays. Larsen & Toubro pulled out of a stretch of the Airport-Barasat Metro route earlier this year after encroachment stalled work and the administration allegedly sat twiddling its thumbs.

The East-West Metro project, stretching 14.67km from Salt Lake’s Sector V to Howrah Maidan, is stuck at three places — Bowbazar, BBD Bag and Duttabad in Salt Lake — because of encroachment that the government seems loath to remove.

The alignment of the proposed route between Central station and Howrah Maidan hasn’t been finalised because the state government is yet to hand over land at Bowbazar to the KMRC. This is despite the high court’s stay on a lower court’s order to give the land back to the original owners.

Officials of the KMRC, the nodal agency for the Rs 4,875-crore project, said the progress of work was 9.25 per cent in 2011-12 and 10.5 per cent in 2012-13. The target for the current fiscal is 19 per cent but the agency hopes to achieve not more than 9 per cent given the pace of work and the attendant problems.

The KMRC has written to the state transport department four times in the past two-and-a-half months to confirm when the earmarked land would be made available for Afcons to start work on track alignment. “Since February 18, we have written four letters, the last one this month. But we have yet to receive a reply,” an official said.

The stalemate means nobody even knows where the stations on that stretch will be located and which route the tracks will take. “We need a route map to start construction. But how can we draw up one until the required land is made available?” a source in Afcons said.

Afcons and its 50:50 project partner Transtonnelstroy, a Russian company, had bagged the Rs 938-crore contract to build a “transportation tunnel” from Central station till Howrah Maidan via the Hooghly in March 2010. The same companies are together building the Chennai Metro.

Sources in Afcons said the company had so far invested around Rs 400 crore in the East-West Metro project. Two tunnel-boring machines meant to create an underwater passage through the Hooghly were imported from Germany for Rs 120 crore.

“The money has been invested but nobody knows when the alignment will be finalised. The project can’t take off without a consensus between the state and the implementing agency,” an official said.

A clause in the contract states that if there is a “continuous breach” by the KMRC in handing over areas for construction and fixing the alignment, compensation can be claimed.

The proposed shaft outlet on the Calcutta side needs to be aligned with the Mahakaran station, otherwise the entire design would have to be altered, experts said.

“We are in talks with the KMRC and the issues will be resolved very soon,” a senior government official said, repeating an unfulfilled assurance heard several times earlier.

The KMRC, the railways and the Union urban development ministry are not keen on a realignment of the originally proposed route, as suggested by the state government.

The Mamata Banerjee government wants the proposed Mahakaran station to be relocated to the BBD Bag bus terminus instead of building it on Brabourne Road.

In September 2012, the state government had commissioned a survey by RITES for a new route along Laldighi, Esplanade and Nirmal Chunder Street in an attempt to bypass the land hassle in Bowbazar. But Japan International Cooperation Agency, the principal lender, objected to any change in the route.

Afcons and its partner recently started work on the station building but that is only 10 per cent of the total project. “We can’t work on a piecemeal basis. Construction has to start simultaneously in other areas for the project cost to be kept under control,” a source in the joint venture said.

Some of the 150-odd engineers and 400 workers who had been sitting idle since being deployed are being shifted to other projects. Company sources said every month’s delay was raising the project cost by 5 to 6 per cent.

It was in March this year that the division bench of Chief Justice A.K. Mishra and Justice Joymalya Bagchi removed a seemingly insurmountable hurdle with its interim stay on a lower court’s order in favour of 90 families of Bowbazar who wanted their land back.

Justice Jyotirmoy Bhattacharya had ruled in September 2012 that the process of acquiring land in Bowbazar for the East-West Metro was “illegal”. The petitioners had argued that the government issued acquisition notices in August 2009 but declared the quantum of compensation in November 2011. They cited the Land Acquisition Act of 1894, which states that a compensation notice should be issued within two years of the acquisition order.

The high court’s interim stay last year leaves the government free to acquire the land, which is still in possession of the petitioners.

When Mamata was the railway minister and the project was under the state government, the railways had delayed handing over land for the proposed terminals in Howrah and Sealdah by over three years.

The revised deadline for the first phase of the project is August 2015, which officials say would be difficult, if not impossible, to meet. The plan is to open the stretch between Sector V and Sealdah first but the status quo on encroachment at Duttabad in Salt Lake has put a damper on it.

Work on 12 piers has been held up for a long time because of the government’s failure to remove the encroachments there.