The Chinese engineering firm, whose Rs 470 crore contract was terminated recently, has moved the Delhi High Court against Indian Railways. The contract was terminated due to the “poor progress” as stated by an official.
Yesterday, Indian Railways had terminated the contract of a Chinese company for signaling and telecommunication work on the DFCCIL’s Eastern Dedicated Freight Corridor (DFC) citing poor progress of work. Mr. Anurag Sachan , MD of Dedicated Freight Corridor Corporation of India Limited (DFCCIL) stated- “We have served the termination letter today. We would like this work to be done by some Indian player. We are drawing fresh specifications for a re-bid to that effect.
A day after termination of the contract, the firm moved the Delhi High Court. The plea seeks prevention from encashing it’s bank bank guarantee as the World Bank has not given a no objection certificate for the termination. The World Bank is funding the work on DFCCIL’s Eastern Dedicated Freight Corridor. The matter is to be heard on 23rd of this month.
The Contract between DFCCIL and the Chinese Firm:
The project for the signalling and telecommunication work in 417 km long Kanpur-Deen Dayal Upadhyay section of the Eastern Dedicated Freight Corridor (EDFC) was bagged by Beijing National Railway Research and Design Institute of Signal and Communication Group Co. Ltd, a solely-owned subsidiary of CRSC. The contract worth Rs. 500 crores was awarded to the Beijing National Railway Research and Design Institute in June 2016. The project was scheduled to be completed by 2022.
Termination of the contract:
The contract was awarded in 2016 but since then the authorities had been dissatisfied with the work of the Chinese firm. The process to oust the Chinese firm from the project had started as early as January 2019 officials stated. According to the Dedicated Freight Corridor Corporation Limited officials, even after four years, the progress in the project was only 20 per cent. The firm had failed to complete its work within the given time frame. They also said that the company didn’t have engineers or authorised personnel at the project site which was a serious concern.
Company also failed to 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,” an official said.
The DFCCL had also applied to the World Bank in April this year informing them of their decision to terminate the contract of the Chinese company. The World Bank has not given a no-objection certificate for the termination yet. Railways has decided to not wait for the World Bank and fund this portion of the project on its own.
“We have served the termination letter today. We would like this work to be done by some Indian player. We are drawing fresh specifications for a re-bid to that effect, We will go by Indian standards and specifications for the work now,” said Anurag Sachan, Managing Director of Dedicated Freight Corridor Corporation of India Limited (DFCCIL).
Sachan further added that:
the termination of contract with Chinese firm was done after 14-day notice due to poor performance in the progress of project.
Move to terminate contract comes in backdrop of strained ties between India & China after 20 Indian soldiers were killed in a fierce clash with Chinese troops in Galwan Valley in the eastern Ladakh last month.
