Bengaluru suburban rail: K-RIDE may re-tender two corridors after standoff with L&T

Bengaluru suburban rail project

Rail Infrastructure Development Company (Karnataka) Limited (K-RIDE) — the implementing agency of Bengaluru suburban rail project — is likely to re-tender two corridors that were earlier awarded to L&T.

K-RIDE and L&T have been at loggerheads after the agency reportedly failed to hand over the required land. This led to L&T suspending work on two key corridors - 25-km Mallige Line (Baiyyappanahalli–Chikkabanavara) and 46-km Kanaka Line (Heelalige-Rajanakunte) - since March 2025.

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“In K-RIDE board meeting last month, it was discussed that the contracts for these two corridors may be scrapped and fresh tenders floated. However, a clear picture will emerge after State Industries and Infrastructure Development Minister MB Patil returns from Japan. We are likely to take a final decision in the next K-RIDE board meeting within 15 days,” a source aware of the developments told Moneycontrol.

L&T was not immediately available for comment. However, K-RIDE MD Govinda Reddy told Moneycontrol that no decision has been taken so far.

Also, read: Two Bengaluru suburban rail corridors to be ready by Dec 2026: Railways MoS V Somanna

Union government approved the 148-km suburban rail project in October 2020 with a six-year deadline (2026). In June 2022, Prime Minister Narendra Modi, while laying the foundation stone, promised to complete the 148-km long-delayed Bengaluru suburban rail project (four corridors) - stalled for 40 years - within 40 months. However, K-RIDE is yet to float civil work tenders for the remaining two corridors - Sampige Line (KSR Bengaluru–Devanahalli) and Parijaata Line (Kengeri–Whitefield).

Asked if the project could face further delays due to fresh tenders, the source admitted: “There is already a delay of six months, and it may take another six months to finalise new contractors. L&T has walked away from the project, approached the court, and sought compensation. It makes no sense to continue with existing contractor since it is not willing to resume work even in places where work fronts are available. We already have tender documents ready. We can float tenders within a month, take another two to three months to finalise them, and the contractor will require three months to mobilise men and machinery.”

He added that Karnataka Industrial Areas Development Board (KIADB), which is acquiring private land for the project, had promised to complete the process in two-three months. However, some landowners have gone to court, and those cases are now being settled.

New tenders in multiple packages?

It is learnt that K-RIDE plans to split the corridors into multiple packages in the next round of tenders. “Had the earlier tenders been floated in two-three packages for each corridor, at least half the work would have been completed by now. But since the same contractor was awarded the entire work for two corridors, the project suffered a setback,” the source added.

Also, read: Karnataka minister pulls up L&T for slow pace of work, says Bengaluru suburban rail might not be ready by Aug 2025

Officials said the Mallige corridor, awarded to L&T in August 2022 at a contract value of Rs 860 crore, has seen only 22 percent progress so far. Similarly, Kanaka Line, awarded in December 2023 at Rs 1,040 crore, has recorded just 3 percent completion.

The source alleged that L&T was making unrealistic demands. “It is true that there was a delay in handing over land, and we were ready to allow cost escalation. But they were insisting on new rates that were unrealistic. L&T appears to have underestimated the cost of the Mallige corridor. While our estimate was around Rs 1,000 crore, L&T quoted Rs 850 crore, whereas Afcons Infrastructure quoted Rs 1,219.7 crore and NCC Rs 1,582.5 crore. The wide gap between L1 and L2 clearly shows that L&T had underestimated the costs.”

L&T demands compensation

On July 28, L&T terminated its contracts for the two corridors, citing repeated breaches by K-RIDE. In a legal notice, the company alleged that despite the Letter of Acceptance (LoA) issued in August 2022, K-RIDE had handed over only 8.28 percent of encumbrance-free land in the first nine months, leaving machinery and manpower idle. Even 22 months later, only 49.44 percent of the work-front was made available, and that too in fragmented stretches.

L&T claimed it suffered 'massive losses' as K-RIDE failed to acquire private land, clear encroachments, and shift utilities. The company demanded Rs 505.89 crore in dues and compensation, along with the release of its performance, mobilisation, and security guarantees worth about Rs 78 crore. It also moved the Commercial Court in Bengaluru, which restrained K-RIDE from invoking its bank guarantees.

K-RIDE counters L&T’s claims

K-RIDE said L&T had entered into two agreements for Corridors-2 (Chikkabanavara–Benniganahalli) and 4 (Heelalige–Rajanakunte), valid until September and October 2026 respectively.

The agency argued that the contracts do not permit unilateral termination by L&T, calling its July 31, 2025 notice a 'clear violation' of agreement conditions. According to K-RIDE, L&T made unreasonable demands, including revising the contract price and converting the EPC contract into an itemised BOQ format, neither of which were allowed under the agreement. While an 'amicable settlement committee' had been formed to address claims, K-RIDE said L&T walked away, showing 'lack of interest' in execution.

The agency maintained that about 84 percent of the work-front in Corridor-2 and 17 km in Corridor-4 had been handed over, but L&T’s progress was 'not commensurate' due to poor mobilisation, delays in design finalisation, and frequent changes in project managers. Despite repeated reminders, K-RIDE said, L&T failed to deliver. K-RIDE said it is now working out modalities to complete the balance works in both corridors to minimise delays in commissioning.

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