rediff.com

NewsApp (Free)

Read news as it happens
Download NewsApp

Available on  

Rediff News  All News 
Rediff.com  » Business » Kolkata flyover collapse: IVRCL's new orders might be hit

Kolkata flyover collapse: IVRCL's new orders might be hit

April 02, 2016 11:37 IST

In 2009, the company was blacklisted by the then Andhra Pradesh government after two labourers were killed when a trench dug for sewage pipe caved in

Debt-laden infrastructure company IVRCL might be blacklisted in the light of the flyover collapse in Kolkata.

Construction companies getting blacklisted for delays and other causes are not something new and IVRCL itself has faced such situations in the past. However, given the company’s financial situation, lack of new orders could further delay its possible recovery.

“Getting blacklisted is something the infrastructure companies have to live with. Companies would explain their position to governments on issues that led to their exclusion from awarding new projects and get their names restored in due course of time. This is a time-taking process,” a senior IVRCL official told Business Standard.

In 2011, IVRCL was blacklisted, along with New Delhi-based SPML by Uttar Pradesh Jal Nigam, for allegedly not meeting the quality standards in drinking water and sewerage projects in Allahabad and Kanpur.

In 2009, the company was blacklisted by the then Andhra Pradesh government after two labourers were killed when a trench dug for sewage pipe caved in. The labour department had accused the company of negligence though the company cited other reasons for that incident.

Being a much bigger disaster involving an urban project, the backlash could to be much higher as the governments in other states might also take safer route in allowing the firms involved in such big accidents, say observers.

The company’s revenues fell to an all-time low of Rs 448 crore (Rs 4.48 billion) in the December 2015 quarter keeping the net loss for the quarter at around Rs 300 crore (Rs 3 billion) at a time the firm required at least Rs 1,500 crore (Rs 15 billion) revenues in each quarter to be able to repay the debt and reduce its losses.

Photograph: PTI

BS Reporter in Hyderabad
Source: