Railways to terminate Chinese company's contract due to 'poor progress'

A day after the Department of Telecom asked BNSL not to use Chinese based firms equipment in its network, the Indian Railways on Thursday decided to terminate the signalling contract given to Chinese company.

Though officials claim that the termination of contract is mainly due to poor work progress and inability on part of company to complete the project on time, the government move came after 20 Indian Army personnel killed in a fierce clash with Chinese troops in the Galwan Valley.

In 2016, Dedicated Freight Corridor Corporation of India Limited (DFCCIL), an Indian Railway company tasked to build freight corridors, awarded Rs 471 crore contract to China based Beijing National Railway Research and Design Institute of Signal and Communication Group Limited.

The project was to install signalling and telecommunication work in the 417-km-long Kanpur-Deen Dayal Upadhyaya Junction (previously Mughalsarai) section of the Western Dedicated Freight Corridor project. Though the company was supposed to complete the project by 2019, only 20 per cent progress in the works has been made in last four years.

Since it is World Bank funded project, the DFCCIL had written to the Bank expaining its wish to terminate the contract due to poor progress. If World Bank refused to cancel contract given to Chinese firm, then the DDFC can fund on its own resources and award the contract to other company, said the official in the Railways.

The railways now planning to award this project to domestic company, sources said.

The Indian Railways, while seeking to cancel the contract given to Chinese company, listed several issues including no progress in physical works due to no tie with local agencies, no improvement in works despite holding several meetings, reluctance of the company to furnish technical documents as per agreement, non-availability of their engineers/authorised personnel at site was serious constraint, material procurement, which is an independent activity, has not been done earnestly.

“In view of poor progress, it is decided by DFCCIL to terminate this contract.” said the official.

On Wednesday the Department of Telecom had asked BSNL to stop buying any equipments from Chinese firms. The government is also decided to tell private telecom firms to reduce their dependence on Chinese companies due to network security.

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.