After Indian Railways shows Chinese firm the door, China company retaliates, sues railways

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Published: July 18, 2020 11:37 AM

On Friday, a PSU under Piyush Goyal-chaired Railway Ministry terminated the contract of a Chinese company for signalling and telecommunication work on the DFCCIL's Eastern Dedicated Freight Corridor (DFC) citing poor progress of work.

The DFC project, which involves two corridors Eastern DFC and Western DFC, is being implemented by the DFCCIL .

Indian Railways shows the door to Chinese firm! Indian Railways has recently terminated the contract of a Chinese company for a signalling and telecommunication project for the upcoming freight corridors. On Friday, a PSU under Piyush Goyal-chaired Railway Ministry terminated the contract of a Chinese company for signalling and telecommunication work on the DFCCIL’s Eastern Dedicated Freight Corridor (DFC) citing poor progress of work. According to a PTI report, the work was to be executed on a 417 km long section of the Eastern DFC corridor between Kanpur and Mughalsarai. The DFC project, which involves two corridors Eastern DFC and Western DFC, is being implemented by the DFCCIL (Dedicated Freight Corridor Corporation of India) Limited.

The Managing Director of DFCCIL, Anurag Sachan was quoted in the report saying that the termination letter was issued to China’s Beijing National Railway Research & Design Institute of Signal & Communication company after a 14-day notice. The company had bagged the contract, worth Rs 471 crore in the year 2016.

Meanwhile, the Chinese firm has dragged the national transporter to court against the move even as India served it the formal termination, according to an IE report. According to the report, the move to terminate the contract of the Chinese firm comes in the backdrop of strained ties between the two nations, after 20 soldiers from India were killed in a clash with Chinese troops, last month, in eastern Ladakh’s Galwan Valley.

Earlier, officials had said that the process to eliminate the Chinese company from the DFC project had started as early as the month of January 2019 as the firm had failed to finish its work within the given time period. By then, the Chinese company had only managed to finish 20 per cent of the work, the officials told PTI. In the month of April this year, the project executing company, DFCCIL had approached the World Bank, which is funding the DFC project, informing them of their decision to terminate the contract of the Chinese company.

According to Sachan, due to poor progress made by the Chinese company, which led to the immense delay in the work, the DFCCIL has terminated the contract. The DFCCIL is yet to receive the NOC from the World Bank, but the corporation has conveyed to the World Bank that it is terminating the contract of the Chinese company and will fund the works on its own, he added.

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