Reliance Infrastructure has won over 1,250 crore arbitration cases. The company said that this money will be used to reduce debt. The company aims to become debt free next year.
Rachita Prasad, Mumbai
Reliance Infrastructure has won against Damodar Valley Corporation ( DVC ) in an arbitration case of over Rs 1,250 crore. Anil Ambani's company Reliance Infrastructure told ET that the money would be used to reduce debt. The company aims to become debt free next year.
Reliance Infrastructure has won against Damodar Valley Corporation ( DVC ) in an arbitration case of over Rs 1,250 crore. Anil Ambani's company Reliance Infrastructure told ET that the money would be used to reduce debt. The company aims to become debt free next year.
A spokesperson for Reliance Infrastructure said, "The arbitration tribunal's verdict confirms the company's position to be correct." The country's engineering and construction companies are required to get their dues on time, so that they can participate in large infrastructure projects and they will not have the problem of working capital.
The case relates to DVC's 1,200 MW Raghunathpur Thermal Power Project in West Bengal. The contract value of this project was Rs 3,750 crore. Reliance Infrastructure was the engineering and construction contractor in it. Reliance Infrastructure reported that a three-member arbitration tribunal has said that DVC will have to pay Rs 898 crore to Reliance Infrastructure for various claims. Along with this, the tribunal has also directed DVC to release a bank guarantee of Rs 356 crore within four weeks.
Reliance Infrastructure said it would request DVC to immediately pay 75% of the arbitration decision in lieu of bank guarantee. This is according to a circular of the NITI Aayog on this issue. The matter was in arbitration for two years due to a dispute between the two companies.
The case relates to DVC's 1,200 MW Raghunathpur Thermal Power Project in West Bengal. The contract value of this project was Rs 3,750 crore. Reliance Infrastructure was the engineering and construction contractor in it. Reliance Infrastructure reported that a three-member arbitration tribunal has said that DVC will have to pay Rs 898 crore to Reliance Infrastructure for various claims. Along with this, the tribunal has also directed DVC to release a bank guarantee of Rs 356 crore within four weeks.
Reliance Infrastructure said it would request DVC to immediately pay 75% of the arbitration decision in lieu of bank guarantee. This is according to a circular of the NITI Aayog on this issue. The matter was in arbitration for two years due to a dispute between the two companies.
In 2007, Reliance Infrastructure won orders to build two units of 600 MW each in 35 and 38 months respectively. The project was delayed due to non-availability of land and opposition from local people. This was completed in February 2016. Reliance Infrastructure had demanded a claim from DVC due to difficulties in completing the project. DVC sought damages from Reliance Infrastructure for not completing the project within the stipulated time.
