Aizawl, June 20: The Mizoram government last week dismissed one of the two firms engaged in constructing the Aizawl-Buangpui highway for failing to comply with the terms of the contract.

The Bagheeratha Engineering Limited, engaged in phase I of the Mizoram State Roads Project, signed a contract with the state government pledging to complete the Aizawl-Buangpui state highway by August 2005.

The team from the World Bank, which is the funding agency for the Rs 107.7 crore project, inspected the work done by the firm last month and expressed dissatisfaction with the progress.

It informed the state government that though the firm began the project in August 2002, it has only completed 20 per cent of its assignment and is set to miss the deadline.

It also expressed dissatisfaction with the quality of the work done by the firm.

A source said the firm had been under the scanner for sometime following reports from a Singapore-based supervision consultant that its work was not up to the standard.

The source said the firm had run out of money and had not been able to pay its employees since March. ?The company has accumulated a debt of more Rs 10 lakh at Diki?s Cement Store,? the source added.

With the termination of the firm?s contract, the project will be executed by the other contractor, Ashoka Buildcon Limited.

The PWD has confirmed that the government has seized the earnest money of Rs 22.88 crore, deposited by Bagheeratha Engineering Limited.

Meanwhile, environmentalists claimed that the contractors were paying little attention to the impact of the construction on the environment.