2 min readBengaluruApr 6, 2026 10:54 AM ISTPM Narendra Modi laid the foundation of the Bengaluru Suburban Rail Project in June 2022. (File Photo)The Rail Infrastructure Development Company (Karnataka) Limited, or K-RIDE, has successfully encashed performance bank guarantees worth Rs 57 crore issued by Larsen & Toubro (L&T) through YES Bank, following an arbitration tribunal’s rejection of L&T’s plea to block the move.The guarantees were linked to civil works under Corridors 2 and 4 of the Bengaluru Suburban Rail Project (BSRP). K-RIDE completed the encashment on Saturday (April 4), after the tribunal upheld its position that L&T had defaulted on both corridor contracts and terminated the agreements unlawfully, outside the stipulated contractual terms.The dispute escalated after L&T terminated the agreements and obtained a commercial court stay against the encashment. L&T also invoked the arbitration clause, leading to the formation of a tribunal comprising retired Supreme Court and high court judges to review claims from both sides. The commercial court subsequently referred all related matters to this tribunal.The tribunal’s refusal to grant L&T an injunction cleared the way for K-RIDE to proceed.The dispute arose after K-RIDE allegedly failed to provide the required land, prompting L&T to halt work on two corridors since March last year: the 25-km Mallige Line (Bennigenahalli-Chikkabanawara) and the 46-km Kanaka Line (Heelalige-Rajanukunte).L&T had entered into two agreements with K-RIDE for Corridor-2 and Corridor-4 on August 26, 2022, and December 12, 2023, respectively, and the contract period was extended up to September 2026 and October 2026, respectively, upon request by the contractor.It can be recalled that the Union government approved the 148km Bengaluru Suburban Rail Project in October 2020, and the deadline for the completion of the project was 2026. The foundation was laid in June 2022 by Prime Minister Narendra Modi, almost a year before the Karnataka Assembly elections. However, the project faced several hurdles, including land acquisition and many more.Stay updated with the latest - Click here to follow us on Instagram© The Indian Express Pvt LtdAdvertisementLoading Recommendations...