New Delhi: Giving major blow to a Chinese engineering firm, the Indian Railways has terminated a contract worth Rs 471 crore for signalling on 417 km route of the Eastern Dedicated Freight Corridor.

The Dedicated Freight Corridor Corporation of India (DFCCIL), the deciding authority for the mega project, terminated the contract with Beijing National Railway Research and Design Institute of Signal and Communication Group Co Ltd.

“The termination letter was issued on Friday after 14-day notice to the Beijing National Railway Research and Design Institute of Signal and Communication Group,” Dedicated Freight Corridor Corporation of India Ltd (DFCCIL)’s Managing Director Anurag Sachan told media.

The move to terminate the contract comes in the backdrop of strained ties between India and China after 20 Indian soldiers were killed in a fierce clash with Chinese troops in the Galwan Valley in eastern Ladakh last month.

Why Chinese firm was ousted from project

The process to oust the Chinese firm from the project had started as early as January 2019 as it had failed to complete its work within the given time frame, officials had earlier said.

According to the DFCCIL officials, even after four years, the progress in the project was only 20 per cent.
Other issues cited as reasons for the company’s eviction include “non-availability of engineers at site; no progress in physical work; no material procurement work; and no progress in work despite several meetings.

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.

Contract signed 4 years ago in 2016

The Chinese company had secured a contract for designing and installing signal and telecommunication network for the 417-km DEFRC segment between Kanpur and Deen Dayal Upadhyaya Station (Mughal Serai junction) in UP.
The Railways had awarded the contract four years ago, and the Chinese company was a lone entry for a Chinese presence in the mega project.

The 3,373-km DFC, a flagship project of the Railways, aims to augment rail transport capacity to meet the growing requirement of movement of goods by segregating freight from passenger traffic.

Indian firm to be picked for mega project

Anurag Sachan, MD of the DFCCIL said, “This part of our project was funded by the World Bank and this project was given to a Chinese company by following the World Bank’s procedure.”

“Now, as we have terminated this contract and we have decided to complete it with our own railway party,” he said.

Sachan further said, “As the tender has been terminated now, we don’t need to go to the World Bank and we have put the terms and conditions in such a way that we will be able to give this contract to some Indian players.”