Revenue Recognition for service provided during contract awaited renewal

Nothing wrong here, just because the contract is expired and there is a gap doesn’t mean any problems. Both are going concerns, in view of that, there is no threat of substitute product to the seller for any immediate danger. And also, they are renewing the contract lately and any risks and rewards are between them. This is government to government entities. IndAS is applicable.

Other forms of arrangement is often described as a ‘build- operate-transfer’, a ‘rehabilitate-operate-transfer’ or a ‘public-to-private’ service concession arrangement.
3 A feature of these service arrangements is the public service nature of the obligation undertaken by the operator. Public policy is for the services related to the infrastructure to be provided to the public, irrespective of the identity of the party that operates the services. The service arrangement contractually obliges the operator to provide the services to the public on behalf of the public sector entity. 

the operator is obliged to hand over the infrastructure to the grantor in a specified condition at the end of the period of the arrangement, for little or no incremental consideration, irrespective of which party initially financed it.