Taking strong exception to the inordinate delay in execution of works for a bypass road, the State Government on Friday cancelled the contract awarded to Gammon India.
The proposed project envisaged a 2.5-km, four-lane bridge and a 103-km, four-lane road, including a 48-km bypass road.
The road is proposed to be built from the Kaza junction near Guntur to join the National Highway 5 at Chinaoutpalli, beyond Gannavaram, after crossing the Krishna river upstream Kanakadurgamma Varadhi.
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After implementation of the project, vehicles from Chennai bound for Kolkata need not touch the busy Vijayawada city.
Vijayawada MP Kesineni Srinivas (Nani) confirmed the development saying the Government had terminated the agreement because of an inordinate delay in execution of works.
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“The company is not in a position to execute the project due to financial problems. Following reports that the company is bankrupt, we have decided to take control of all the toll gates being operated by it. We have given them enough time and we don’t want to waste any more time. Whatever money the company owes to the National Highway Authority of India will be recovered from the bank guarantees,” said the MP.
He said the project would now be converted into EPC (Engineering, Procurement and Construction) mode and works would start in six or seven months.
Gammon India had offered to pay Rs.57 crore to the government every year, besides bearing the construction cost of the bridge and road. Collection of toll fee for 25 years after completion of the works was yet another clause.
As per the conditions, the project should have been completed in 30 months from the date of awarding the works.