"JN Port Resolves Dispute with EPC Contractor Regarding SEZ Project"

After a prolonged period of negotiation, the Jawaharlal Nehru Port Authority (JNPA) has successfully settled a longstanding commercial dispute with the Engineering, Procurement, and Construction (EPC) contractor responsible for infrastructure development within the Special Economic Zone (SEZ). Facilitated by the Conciliation and Settlement Committee established by the Ministry of Ports, Shipping, and Waterways, the settlement agreement was formalized on April 12, marking a significant step towards resolving the contentious issue.

The agreement delineates the financial terms for the settlement, including the amount to be paid to the EPC contractor and subcontractors, as well as the timeline for disbursement. Additionally, it stipulates that JNPA will assume responsibility for completing the remaining works, with costs to be recovered from the EPC contractor. Notably, the agreement also outlines penalties for project delays, with the EPC contractor and subcontractors collectively liable for liquidated damages amounting to Rs. 1,20,74,945.

Reflecting on the resolution, Unmesh Wagh, Chairman of JNPA, hailed the agreement as a significant achievement, describing it as a complex conciliation process. The dispute arose from a project initiated in January 2017, when the port authority awarded an EPC contract to a joint venture between Backbone Enterprise Ltd, Tarmat Ltd, and Al Fara’a Infraprojects Pvt Ltd. However, due to various financial and regulatory challenges, including the contractor's loan accounts turning non-performing assets (NPAs) and subsequent GST deactivation, the project encountered delays and disruptions.

In December, following unsuccessful attempts to resolve the dispute through conventional means, the parties turned to the Conciliation and Settlement Committee (CSC), chaired by Gopal Krishna, a former Secretary in the Ministry of Ports, Shipping, and Waterways. The protracted conciliation process involved extensive deliberations and over 30 meetings with stakeholders, ultimately resulting in the signing of the settlement agreement.

Wagh emphasized the project's successful completion and highlighted its potential to significantly contribute to India's SEZ landscape. Despite facing numerous challenges, including legal proceedings, the project has emerged as a testament to effective stakeholder collaboration and government flexibility.

The operationalization of the SEZ in June 2020 has already yielded substantial revenue for JNPA through plot leasing to private firms, with further revenue expected upon leasing of the remaining land. Additionally, the SEZ has attracted significant cargo traffic and interest from major corporations, underscoring its strategic importance and economic potential for the region.

ET