New Delhi: The introduction of amended arbitration scheme to revive construction sector has received a good response as 55 claims worth Rs493.53 crore were submitted to the road ministry within a month of its implementation.
According to the Action Taken Report (ATR) submitted by the ministry, till 4 January it had received 55 claims and in 32 of them communications have been sent to the contractor/concessionaire for opening of escrow accounts and submission of the bank guarantee. These 32 cases amount to Rs378.05 crore.
A road ministry official requesting anonymity said, “The response has been good so far and we expect this to revive the infra sector and especially construction of national highways.” He added that Rs 249.37 crore have already been released to IRB Infra Developers Limited under two claims submitted by them.
Out of the 55 claims received by the road ministry 53 are related to national highways construction.
The Hindustan Construction Company tops the list with 20 claims, followed by Oriental Structure Engineers with 16 claims, including two joint venture projects—AFCONS -5 and Gayatri 3.
The other companies, which have filed claims are IL&FS, Unitech and Sunway Construction.
As per the ATR, the road ministry is pursuing arbitration proceedings in 42 cases to switch over to the provisions of amended Arbitration Act.
The scheme, which was approved by CCEA last year in August and introduced by the road ministry in December 2016, entailed that the government agencies would pay 75% of the arbitral award amount to an escrow account against margin free bank guarantee, in those cases where the award is challenged.