A truck carries supplies to Ladakh on a treacherous road of Zojila Pass
A truck carries supplies to Ladakh on a treacherous road of Zojila Pass | Yawar Nazir/Getty Images
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Work has come to standstill on the Zojila tunnel due to IL&FS’s troubles, which has also hit the Z-Morh tunnel in the region.

New Delhi: Two high-profile infrastructure projects in Jammu and Kashmir have been hit by the crisis in the Mumbai-based Infrastructure Leasing & Financial Services (IL&FS).      

While work on the Rs 6,809-crore Zojila tunnel project has come to a standstill, five months after Prime Minister Narendra Modi laid its foundation, the Z-Morh tunnel project, part of efforts to ensure all-weather connectivity between Srinagar and Kargil, is set to miss its deadline of 2019.

Both projects are being financed by IL&FS, the infrastructure lending giant now reeling under a debt burden of over Rs 90,000 crore.

Sources said that the pace of work at the Zojila project, India’s longest tunnel, had already been on the slower side due to IL&FS’s financial troubles, but has now come to a complete standstill due to the full-blown crisis engulfing the lender.

“We did not have doubts about their (IL&FS) technical efficiency but they had financial troubles, which is why work was moving at a slow pace,” said N.N. Sinha, managing director of the National Highways and Infrastructure Development Corporation (NHIDCL), which is overseeing the project.

“Now after this debt issue, IL&FS has not written back to us to convey if they wish to continue with the project. Work has come to a standstill and we are waiting for their reply,” Sinha added.

A spokesperson for IL&FS Transportation Networks (ITNL) said the new board, put in place by the government since the crisis emerged, would decide on the project.

“With the new management having taken over, they haven’t decided on the project yet,” the spokesperson said. “They’ll come to the conclusion very soon. They’ll take time in submitting their report and accordingly the management will take its decision to proceed further.”

Also read: India must allow its shadow banks to suffer some pain right now

All-weather tunnel

The Zojila Tunnel, on the Srinagar-Leh highway, is a proposed 14.150 km-long, two-lane tunnel. It is to ensure all-weather connectivity, along with the Z-Morh tunnel, between Srinagar and the Leh-Ladakh region. At present, the highway is shut for seven months in a year due to snow.

The NHIDCL had signed a MoU with ITNL, a subsidiary of IL&FS, and the Ministry of Road Transport & Highways, in January this year, for the construction of the tunnel.

The foundation stone for the project was laid amid much fanfare by Prime Minister Narendra Modi in June this year. The PM had then even said that he would ask the ministry concerned to look at ways of reducing the seven-year time period for completion of the project.

Now, however, doubts have arisen over the project due to IL&FS’s troubles.

Z-Morh tunnel to miss its deadline

The Z-Morh tunnel project, which was the first step towards ensuring all-weather connectivity between Srinagar and Kargil, is set to miss its deadline of 2019. The project is now likely to be completed by December 2020.

The project was launched by the previous UPA government in October 2012.

NHIDCL MD N.N. Sinha said militancy restrictions in Kargil and financial problems of IL&FS have been the reasons for the delay.

He, however, said that almost 50 per cent of the work on the project was complete.

The 6.5 km tunnel is being constructed near Gagangir in Ganderbal district of Jammu and Kashmir.  It gets its name from the Z formation between Sonamarg and Gagangir.

Also read: What the new board of IL&FS needs to do to rescue it

The IL&FS crisis

The three-decade-old IL&FS is a lending giant based out of Mumbai. It had been powering the country’s public infrastructure expansion.

IL&FS, however, triggered a crisis in the financial sector in September when it defaulted on a few payments.

It was soon found that the company had racked up debts of over Rs 90,000 crore. The government has since seized control of the conglomerate, replacing the old board with a new one in a bid to ease the crisis.

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