New Delhi: The Zojila tunnel project for all-year connectivity between Leh and Srinagar finds itself stalled for the sixth time in six years after the Modi government cited “administrative reasons” to cancel the bidding process started this February.
The bidding process for the 14.2-km tunnel was annulled on 7 August, two days after the Modi government stripped J&K of its special status and split it into two union territories: J&K and Ladakh.
The deadline for submission of bids was to end last Thursday, 8 August.
Of the five earlier times bids were invited for the project between 2013 and 2018, four drew no response. The fifth attempt led to the selection of IL&FS as the contractor, but it came to naught as the company ran out of funds.
Senior officials of the Union Road Transport Ministry told ThePrint that the latest bidding process was annulled at the last moment owing to an escalation of costs since the last estimate was approved by the the Cabinet Committee on Economic Affairs (CCEA) in 2018.
According to the officials, the total project cost of Rs 6,808.69 crore had escalated by 23 per cent over the past year, mainly on account of a surge in land acquisition cost and inflation.
“The revised TPC (total project cost) is now estimated to be approximately Rs 8,400 crore,” one of the officials said. “The ministry had already invited fresh bids in February at the old TPC. However, a day before the deadline for submission of bids was to end, the bidding process was annulled as the ministry decided to first get the revised cost approved by the CCEA.”
Ministry officials said it will take anywhere between three and four months to get the CCEA’s approval.
“We will first get the approval of the finance ministry’s Public Investment Board (which clears every project worth over Rs 1,000 crore before it goes to the Cabinet) and then go to the CCEA,” a second official said.
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Boon for armed forces and tourists
The Zojila tunnel, to be built at an altitude of 4,000 metres, was first announced by the UPA-II in 2013. Had work started then, the project, with an estimated time window of seven years, would have been nearing completion now.
It will connect Srinagar, Kargil and Leh.
In May 2018, Prime Minister Narendra Modi had laid the foundation stone of the project, but work came to a halt amid the IL&FS crisis.
The Zojila tunnel is expected to be a strategic boon for the armed forces as it will provide seamless connectivity between India’s borders with Pakistan and China, while also allowing tourists a wider window to explore J&K.
The existing national highway connecting Srinagar to Leh remains shut for six months of the year because of snowfall.
The project is being implemented by the National Highways & Infrastructure Development Corporation, an agency of the highways ministry.
A jinxed project from the word go
Delays have stalked the Zojila project since it was first announced in 2013. The project was initially to be undertaken under the public private partnership (PPP) mode, but no private player bid to participate.
The project failed to find takers three more times, with private players daunted by the difficult terrain and conflict in Kashmir.
In 2017, the NDA administration decided to convert the project to the ‘engineering, construction and procurement mode’, where 100 per cent of the funding comes from the government.
The original estimate for the project, when the government was inviting bids in the PPP mode, was Rs 9,090 crore. But the cost was reassessed and brought down to Rs 6,808.69 crore when the government took over the project.
Fresh bids were invited. In January 2018, construction work was awarded to IL&FS. However, work was terminated in January 2019 due to financial constraints of the IL&FS group.
In February 2019, NHIDCL invited fresh bids again. This was the process annulled on 7 August.
Rs 50,000 cr worth of highway projects in J&K
Over the last seven to eight years, the Centre has prioritised connecting Jammu and Kashmir to the national highway network. However, the difficult terrain has resulted in a slow pace of construction.
Currently, the Union Road Transport and Highways Ministry, Border Roads Organisation and state public works department are pursuing 24 national highway projects in J&K that are in various stages of completion and together worth over Rs 50,000 crore.
These include the Qazigund-Banihal tunnel project, which is scheduled to be completed by July 2020.
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Everything should pay for itself. Very dovish on human rights, a hawk on the fisc.