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Namma Metro's 216-coach contract with Chinese company in jeopardy

BMRCL has slapped several notices on the company and threatened to encash its bank guarantee of Rs 372 crore
Last Updated : 30 January 2022, 00:05 IST
Last Updated : 30 January 2022, 00:05 IST
Last Updated : 30 January 2022, 00:05 IST
Last Updated : 30 January 2022, 00:05 IST

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The supply of 216 metro coaches that the BMRCL had ordered over two years ago has been delayed because the Chinese firm that won the contract is struggling to find local partners to assemble, test, and commission them.

China’s CRRC Corporation Ltd, whose subsidiary CRCC Nanjing Puzhen Co Ltd won the contract in December 2019 to supply 216 metro coaches at a cost of Rs 1,578 crore, has failed to meet any of the performance indicators set by Namma Metro.

The Bangalore Metro Rail Corporation Ltd (BMRCL) has slapped several notices on the company and threatened to encash its bank guarantee of Rs 372 crore. But for now, the contract is still on.

The CRCC has petitioned the High Court of Karnataka over the BMRCL’s move to encash the bank guarantee. The court has listed the matter for hearing in February. The main reason why the Chinese firm had won the contract was that it offered to supply coaches for about Rs 200 crore less than what the second-lowest bidder had quoted.

As per the tender conditions, the Chinese firm was to manufacture 94% of the coaches in India under the Centre’s Make-in-India policy. It is, however, learnt that CRRC executives have not been able to tie up with a local manufacturer to assemble, test, and commission the metro cars.

Change in FDI policy

The firm is obligated to start delivering the coaches in June this year but a change in the Foreign Direct Investment (FDI) policy has apparently derailed the timeline. The company reportedly approached the BMRCL seeking consent for manufacturing all the 216 coaches in China but the offer was turned down.

“As per the tender clause, there is a provision to tie up with a domestic manufacturer. The company has asked for additional time. We will wait for some time. If they do not get it, we will take suitable action,” Anjum Parwez, managing director, BMRCL, told this newspaper. He added that no decision has been taken to terminate the contract.

The metro coaches are to be equipped with CBTC signalling systems and allow driverless operations.

The BMRCL has intended to use 121 of the new coaches on the purple and green lines and the remaining 95 on Reach 5 between RV Road and Bommasandra, which is currently under construction.

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Published 29 January 2022, 23:44 IST

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