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GIPL has won the arbitration award (Rs161.50 million) against NHAI for refusal to pay early completion bonus for two of its road projects
Gammon Infrastructure Projects Ltd (GIPL) has won the arbitration award for payment of early bonus from the National Highway Authority of India (NHAI) for two of its road projects. NHAI is expected to pay a bonus to GIPL for the early completion of two projects—Rajahmundry Expressway and Andhra Expressway.
“The arbitration has been unanimously decided in our favour,” said Parvez Umrigar, managing director, GIPL. While the NHAI has been struggling to fast-track the completion of its road projects, two of GIPL’s road projects were stuck in the arbitration process, awaiting realisation of the bonus amount for early completion.
The payment for these projects commissioned in 2004, ran into a dispute following NHAI’s refusal to pay the bonus amount.
The Rajahmundry Expressway project involved widening and strengthening of the 53-km stretch between Dharmavaram and Tuni in Andhra Pradesh on National Highway (NH-5), connecting Chennai and Kolkata.
GIPL had achieved the commercial operations date (COD) for this project on 20 September 2004, seventy days ahead of schedule. For this project, GIPL expected a bonus of Rs115 million from NHAI for early completion.
The Andhra Expressway project involved widening and strengthening of the 47-km stretch between Dharmavaram and Tuni in Andhra Pradesh on NH-5.
The project achieved COD on 30 October 2004, thirty days ahead of schedule. The bonus expected from NHAI for this project was Rs46.50 million.
Though the arbitration order has been unanimously decided in GIPL’s favour, NHAI has been given a period of 90 to 120 days to honour the order. “It now depends on them (NHAI) whether to abide by it or challenge it in a court,” added Mr Umrigar. The case has been under consideration since three years and the arbitration order has also spelt out a penalty of interest to be paid.