Ludhiana MC terminates pvt firm’s contract to ply city buses - Hindustan Times
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Ludhiana MC terminates pvt firm’s contract to ply city buses

BySukhpreet Singh, Ludhiana
Feb 27, 2024 05:36 AM IST

The company has been directed to return 82 buses and other assets belonging to Ludhiana City Bus Service Ltd. within seven days

The municipal corporation terminated its contract with Horizon company for operating city bus services immediately across the city on Monday.

Of the total 82 buses handed over to the firm, only 35 were operational on the Kohara, Sahnewal, and Meharban routes. (HT)
Of the total 82 buses handed over to the firm, only 35 were operational on the Kohara, Sahnewal, and Meharban routes. (HT)

In a letter dated January 30, 2024, the municipal corporation highlighted discrepancies regarding the contract duration. The decision comes after the completion of the contract term with the Ludhiana City Bus Service Ltd. and an order has been issued to the firm to return the buses or pay certain fee.

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According to the orders, a copy of which is with HT, “It was made clear via letter dated January 30, 2024 that in the arbitration proceedings you have yourself written that the contract was to complete on the completion of nine years, but now your letter dated January 19, 2024 is contrary to the said stand. This attitude of yours amounts to criminal breach of trust and therefore, this conduct of yours compels the Ludhiana City Bus Services Ltd. to take legal action against you.”

In a letter dated January 30, 2024, the municipal corporation highlighted discrepancies regarding the contract duration. During arbitration proceedings, it was acknowledged that the contract was set to conclude after nine years. However, a subsequent letter dated January 19, 2024, presented a contradictory stance, leading to allegations of a breach of trust.

The termination was further justified by numerous breaches of the contract by the company. These breaches encompassed various aspects outlined in the agreement signed on January 23, 2015.

One significant violation pertained to the failure to deposit performance security as agreed upon in the contract. Additionally, the company exhibited inefficiency in deploying buses according to the fleet development plan, jeopardising the effectiveness of the entire project.

Furthermore, the company neglected to pay monthly quoted charges, advertisement fee, and failed to maintain the buses as per the agreement’s requirements. Despite repeated reminders and directives, these obligations remained unfulfilled.

In response to these breaches, the municipal corporation directed the company to return 82 buses and other assets belonging to the Ludhiana City Bus Service Ltd. within seven days. Failure to comply would result in legal action, as the company would be considered in illegal possession of the property.

Moreover, the municipal corporation clarified that the contract clearly stipulated a nine-year duration. The company was also instructed to clear any outstanding arrears within the same timeframe.

In 2015, when the buses were handed over to the operator, rates were set by the MC for various routes in the city. Presently, only 35 buses are operational on the Kohara, Sahnewal, and Meharban routes.

Meanwhile, tenders for e-buses under the Prime Minister’s e-Bus Sewa Yojana have been floated by the Union government. Civil work for the project is expected to be awarded to the civic body within a few weeks, with officials anticipating the buses to hit the roads by May as part of the project’s progress.

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