RITES Ends Contract with UPSBCL Over Agreement Issues

RITES Limited and U.P. State Bridge Corporation Limited (UPSBCL) have mutually agreed to foreclose their consultancy agreement. 

RITES Limited informed the exchanges that it had earlier received a Letter of Acceptance on October 28, 2024, from U.P. State Bridge Corporation Limited (UPSBCL) for consultancy services. 

The agreement covered supervision, monitoring, quality control, and work zone safety for the construction of bridges, rail over/under bridges, flyovers, and elevated roads in various districts of Uttar Pradesh. RITES was responsible for overseeing civil works to ensure compliance with safety and quality standards.

Reason for Termination

Due to differences in the interpretation of certain provisions of the agreement, RITES and UPSBCL found it challenging to proceed with the project under the existing terms. After discussions, both parties mutually agreed to foreclose the agreement. The decision was formalised through a Foreclosure Agreement, bringing the contract to an early termination.

Impact of the Foreclosure

The company stated that the termination of the agreement does not have any impact on RITES, as the execution of work had not yet commenced. Since no resources were allocated or utilised for the project, the foreclosure does not affect the company’s financial standing or ongoing operations.

RITES Share Price Performance

On April 2, 2025, RITES share price opened at ₹228.00, down from its previous close of ₹230.19. At 9:34 AM, the share price of RITES was trading at ₹225.10, down by 2.21% on the NSE.

Conclusion

The mutual foreclosure of the agreement between RITES Limited and UPSBCL highlights the importance of clear contractual terms in large-scale infrastructure projects. While the termination was necessary due to interpretation challenges, it does not impact RITES’ business, allowing the company to focus on other projects and opportunities in the infrastructure sector.

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