An attempt by a Chinese contractor to supply metro cars to meet a crucial tender condition by tying up with an Indian firm may not seem enough as its demand to increase the price may force the BMRCL to snap the deal.
CRRC Nanjing Puzhen Co Ltd bagged the contract to supply 216 metro cars in December 2019. The contract was worth Rs 1,578 crore. The contract mandated that the Chinese company should either set up a factory in India or tie-up with an Indian company to manufacture the car.
The company failed to comply with the rules causing delays in supplying the cars for the past two years. Things came to a head last year when the Bangalore Metro Rail Corporation (BMRCL) warned that the company would lose the contract, which would mean the metro corporation can encash the Rs 133-crore bank guarantee given by CRRC.
“By now, all the metro cars should have been delivered,” said an official, adding that works related to large projects like Namma Metro will have consequences.
“We gave several extensions and gave May 31 as the final deadline. The (Chinese) company said it signed a memorandum of understanding with Titagarh Wagons in Kolkata to manufacture the cars, but it is asking to revise prices to make the cars,” the official added.
While clarifying that the demand for the price increase is unacceptable, the BMRCL has also said it would not extend deadlines any further, especially since it needs the rolling stock to begin the Phase 2 operations.
The latest deadline has been set as per the BMRCL’s affidavit in the high court after the CRRC’s prayer to the court that the metro corporation should not encash the bank guarantee.
Terms and conditions
To a question on the tender’s status, BMRCL Managing Director Anjum Parwez said they were ready to work with CRRC if it abides by the tender condition.
“The company has said that the old rate would not be feasible and has sought renegotiation of the prices. We have pointed out that the question of renegotiation doesn’t arise. Our tender conditions are very clear. Unless they provide an unconditional MoU, we can accept it. Otherwise, we will proceed as per the tender conditions,” he said.
CRRC bagged the contract by quoting about Rs 400 crore less than domestic manufacturer BEML. Media reports later said that BEML offered to reduce the original contract price of Rs 1,996 crore.