Freight body to end contract with Chinese firm
Hindustan Times
June 19, 2020
The Railway Ministry’s announcement came three days after 20 Indian soldiers were killed as hundreds of troops from India and China fought with iron rods and clubs studded with nails in Ladakh.
The Dedicated Freight Corridor Corporation of India Limited (DFCCIL) is in the process of terminating a contract given to a Chinese firm in 2016 because of delays in the signalling and telecommunication work assigned to it, the railway ministry said on Thursday. The decision to terminate the Beijing National Railway Research & Design Institute of Signal & Communication’s contract was taken in April due to the firm’s “slow progress” in the work, officials said.
The ministry’s announcement came three days after 20 Indian soldiers were killed as hundreds of troops from India and China fought with iron rods and clubs studded with nails in Ladakh. India is mulling economic measures, including limiting China’s access to its vast market, in response to the face-off. HT on Thursday reported at least 100 Chinese products are staring at anti-dumping action and future investments from China, including the participation of its firms in big and important projects such as the 5G market, could be barred.
A ministry spokesperson maintained the DFCCIL’s decision to terminate the contract was due to the firm’s “very poor performance”. The contract relates to signalling and telecommunication work along the Kanpur-Deen Dayal Upadhyaya Junction stretch of the Eastern Dedicated Freight Corridor, which is being built for faster movement of freight across the country’s eastern parts. The World Bank-funded project is worth Rs 471 crore.
“The contract was awarded in August 2016 and was to be completed within 1,000 days. However, the progress has been very slow and hardly 20% of work has been completed. We decided to terminate it and approached the World Bank to grant us NOC [no objection certificate for it] in April and are hopeful the process will be completed by June end. It is an important project and was being monitored by the PMO [Prime Minister’s Office],” DFCCIL managing director Anurag Sachan said.
DFCCIL, a public sector undertaking under the railway ministry, needs the NOC to terminate the contract as per the bank’s project financing regulations. It brought to the bank’s notice the delays in April. “The bank had sought more details on the contract implementation issues. We received most of the information by June 9, 2020, and are currently reviewing the information provided,” a World Bank spokesperson said.
In its termination notice, DFCCIL said only 20% of the work had been completed “despite the passage of four years” and added it has decided to terminate the contract in view of the poor progress. (HT has seen a copy of the notice?). DFCCIL said the company was reluctant to furnish the technical documents. “Non-availability of the engineers/authorised personnel was a serious issue,” it said. It added the physical work on the project also could not progress as the firm had no tie-up with the local agencies. “Material procurement, which is an independent activity, has not been done earnestly. There is no improvement in progress despite repeated meetings with them at every possible level.”
DFCCIL has been tasked with developing the Golden Quadrilateral for linking Delhi, Mumbai, Chennai, and Howrah. The project seeks to decongest up to 70% freight load of the railways.
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