GVK-led Mumbai International Airport Ltd. (MIAL) has terminated a contract with real estate developer Housing Development & Infrastructure Ltd. (HDIL) that was entrusted with the task of executing the MIAL slum rehabilitation project.
“MIAL has served a notice of termination on the company for the Mumbai International Airport Limited slum rehabilitation project citing unsubstantiated charges and the company has not accepted the said notice,” HDIL said on Wednesday.
However, MIAL said it had to scrap the deal as HDIL failed to honour the contract.
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“MIAL entered into Slum Rehabilitation Agreement with HDIL in October, 2007, and, as per the said agreement, HDIL had to complete the slum rehabilitation within four years, that is, by 2011. However, HDIL continuously failed to perform, and MIAL issued a Cure Notice in June 2011. Because of non-performance of HDIL, MIAL board took a decision to terminate the agreement, and, accordingly, in February, 2013, MIAL terminated the said agreement. Prior to termination, MIAL invoked performance securities,” MIAL spokesperson said in a statement.
Meanwhile, HDIL has written off Rs.442 crore that was invested in the construction of houses under this project.
Shares of HDIL tanked 10 per cent to finally close with a loss of 6.80 per cent at Rs.47.95 on the BSE.
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The airport slum rehabilitation project involves the resettlement of 10,00,000 people staying in 85,000 hutments on airport land.