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Metro mishap to adversely affect Gammon Infra's QIP
Gammon India, one of the contractors for the project, is likely to the face the heat. The Metro mishap is the second accident that Gammon India has been involved with. The first was the Hyderabad flyover collapse two years ago. CNBC-TV18’s Priyal Guliani reports how it would impact Gammon.
Gammon India , one of the contractors for the Delhi Metro project, is likely to the face the heat. The Metro mishap is the second accident that Gammon India has been involved with. The first was the Hyderabad flyover collapse two years ago. CNBC-TV18's Priyal Guliani reports how it would impact Gammon.
Here is a verbatim transcript of Priyal Guliani's comments on CNBC-TV18. Also watch the accompanying video.
Gammon India was building this flyover for the Delhi Metro Rail Corporation. The project was estimated to be about Rs 150-200 crore. The losses are estimated to be about Rs 6-8 crore as of now. What we understand is that as this is the second instance after the Hyderabad flyover mishap that happened about two years back. This could have an adverse impact on Gammon India. Analysts also feel it could have an adverse impact on its subsidiary Gammon Infrastructure 's QIP, which is going on as of now.
Coming to the insurance part of it, what we understand is that ICICI Lombard is the lead insurer for Gammon India. The entire cover for this particular project is more than Rs 150 crore. This is a contractor's all risk cover, which covers all the physical damage to the civil work and also the third party liability.
Gammon India has formally intimated the insurers. Whether or not the claims will be settled will depend after the surveyors gave their independent report and review the entire accident.
An important point to note is that Gammon India has not taken a contractor's plants and machinery policy, which essentially covers the damage that has been done to cranes or the machinery, which happened today.
Another important point is that in Hyderabad, while there was a whole dispute whether the insurance claim will be paid out or not because there was a question of negligence on the part of the company, eventually the claim was paid out.
In this case however, we will have to now wait for the surveyors to come out with their report. The surveyors report will depend as to how much and when Gammon India would be able to share the details with the insurers for them to assess the entire damage done.
