RITES Limited, a leading engineering consultancy company, has officially announced the termination of a major contract with U.P. State Bridge Corporation Limited (UPSBCL). The decision follows a mutual agreement between both parties to foreclose the Principal Agreement, which was originally awarded to RITES on October 28, 2024.

Background of the Agreement

The contract was awarded to RITES Limited by UPSBCL for "Consultancy Services for Construction Supervision of Civil Works (CSC)". The project scope included:

• Supervision, monitoring, and quality control of construction works.

• Ensuring work zone safety during project execution.

• Overseeing the construction of bridges, rail over/under bridges, flyovers, and elevated roads across multiple districts in Uttar Pradesh.

However, due to interpretation issues of certain contractual provisions, it became challenging to execute the agreement under the existing terms. As a result, both RITES Limited and UPSBCL mutually agreed to foreclose the contract.

Key Details of the Termination

Impact on RITES Limited

RITES Limited has confirmed that the termination of this contract will not have any material impact on the company's financials. Since the execution of the project had not yet commenced, no financial losses or operational disruptions are expected.

The company has also reiterated its commitment to infrastructure development projects and assured stakeholders that it continues to work on multiple contracts across railways, highways, and urban transport sectors.

Regulatory Disclosure Compliance

In compliance with Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, RITES Limited has officially informed the stock exchanges (NSE and BSE) about this contract termination. The company has also confirmed that there are no legal or financial liabilities arising from the mutual foreclosure agreement.

Future Outlook

While this particular contract has been foreclosed, RITES Limited remains focused on its pipeline of infrastructure projects. The company continues to expand its presence in transportation, urban planning, and engineering consultancy, both within India and globally.

Conclusion

The termination of the major UPSBCL consultancy contract is a strategic decision due to unforeseen interpretation issues in the agreement. However, since the project was never initiated, the impact on RITES Limited is negligible. Investors and stakeholders are advised to stay informed about future project announcements from the company.

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