Chinese firm’s ₹471-crore contract with Railways to be cancelled

The Indian Railways’ Dedicated Freight Corridor Corporation Limited (DFCCIL) has decided to terminate the contract of a Chinese firm worth ₹471-crore due to “poor progress” on the signalling and telecommunication work on a 417-km section on the Eastern Dedicated Freight Corridor.

The Railways had given the ₹471-crore contract to Beijing National Railway Research and Design Institute of Signal and Communication Group in 2016. The work was supposed to be completed by 2019, but only 20 per cent of it has been completed so far, the Railways said.

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This comes after 20 Indian soldiers were killed during a clash with Chinese troops in eastern Ladakh’s Galawan valley on June 15 night, triggering further escalation in tensions in the bilateral relations between the two Asian neighbours. This was the biggest military confrontation between the two countries in over five decades.

However, officials claimed that it was poor performance and inability to deliver the project on time that led to the decision by the implementing agency, the DFCCIL, to terminate the contract. Officials said the DFCCIL has already applied to the World Bank, which is the funding agency, to initiate the process.

“The contract was awarded in 2016. It had a completion period of three yrs; it should have been completed by August 2019, but only 20 per cent work has been done. Therefore, the Dedicated Freight Corridor Corporation of India decided to terminate the contract,” said VK Yadav, chairperson, Railway Board.

The work entrusted with the Chinese engineering major includes design, construction, supply, testing and commissioning of signalling, telecommunication and related works for the 417-km section between Kanpur and Mughalsarai.

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Officials said apart from performance issues, the Chinese company had also shown reluctance in furnishing technical documents, as per the contract agreement, such as logic design of electronic interlocking. It also did not have engineers or authorised personnel at the project site which was a serious concern, they said.

The company also failed to have tie-ups with local agencies which harmed the physical progress of the work, officials pointed out. “There is no improvement in progress despite repeated meetings with them at every possible level,” officials said.

The Eastern Dedicated Freight Corridor or Eastern DFC is a freight specific railway under construction from northern to eastern part of India and is scheduled to be completed by 2022.

(With inputs from agencies)