Indian Railways to terminate Rs 471 crore contract with Chinese company due to 'poor progress'

The Railways had given the contract worth Rs 471 crore to Beijing National Railway Research and Design Institute of Signal and Communication Group in 2016.

Published: 18th June 2020 06:54 PM  |   Last Updated: 18th June 2020 06:54 PM   |  A+A-

Indian trains, Indian railways

For representational purposes (File Photo |EPS)


NEW DELHI: The Railways has decided to terminate the contract of a Chinese company due to "poor progress" on the signalling and telecommunication work on the Eastern Dedicated Freight Corridor's 417-km section between Kanpur and Mughalsarai.

The Railways had given the contract worth Rs 471 crore to Beijing National Railway Research and Design Institute of Signal and Communication Group in 2016.

They were supposed to complete the work by 2019, but only 20 per cent of the work has been completed so far, the Railways said.

The move comes after 20 Indian Army personnel including a colonel were killed in a fierce clash with Chinese troops in the Galwan Valley in eastern Ladakh on Monday night, the biggest military confrontation in over five decades that has significantly escalated the already volatile border standoff in the region.

Officials, however, said it was poor performance and inability to deliver the project on time that led to the decision by the implementing agency, the Dedicated Freight Corridor Corporation Limited (DFCCIL), to terminate the contract.

Officials said the DFCCIL has already applied to the World Bank, which is the funding agency, to initiate the process.

PTI has sent a mail to the World Bank seeking its comment on the issue and is awaiting a reply.

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.

Officials said apart from performance issues, the Chinese company had also shown reluctance in furnishing technical documents, as per the contract agreement, such as logic design of electronic interlocking.

It also did not have engineers or authorized personnel at the project site which was a serious concern, they said.

The company also failed to have 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," officials said.

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.

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