Railways Slam The Door On Chinese Firm; Terminate Rs 471 Crore Signalling Contract


Punishing the Chinese firm, Dedicated Freight Corridor Corporation has taken a bold decision to terminate the Rs 471 cr signalling contract awarded to Beijing National Railway Research & Design Institute of Signal & Communication for slow progress in execution.

With the cancellation of the contract, DFCC, a PSU of Indian Railways, becomes the first to slam the door on a Chinese company in the infrastructure sector amid the growing chorus of boycotting business with China after bloody face-off on the Ladakh front.

The Chinese company has won the contract to install signalling and telecommunication systems on the 417-km long Kanpur-Mughalsarai section in the Eastern Dedicated Freight Corridor.

However, after four years the company could complete only 20 per cent of the job despite several reminders to speed up the job. Till now DFCC has spent about Rs 90 cr on the section and now a fresh tender would be floated for the job.

While the 1468 km long Western DFC is funded by Japan, the 1760-km long Eastern DFC is from Ludhiana in Punjab to Dankuni in West Bengal and is funded by the World Bank.

We have written to the World Bank regarding the slow progress and sought termination of the contract, said DFCC Managing Director AK Sachan.

The contract was awarded after getting World Bank approval and the same is required for termination also.

However, a determined DFCC is ready to execute the job with railways equity even if it did not get the “no objection certificate” from the World Bank.

Though the Chinese company won the contract, there were problems from the very beginning as the company was reluctant to furnish technical documents such as the logic design of electronic interlocking, a vital safety related information.

It has been four years now but they have not submitted the design plan involving signalling structure, auto location hut, cable line yet.

Besides the company is yet to engage local agencies at the ground level and most of the time company’s engineers and authorised personnel were not available on the site.

There was also delay in material procurement as a result the progress was on a snail’s pace despite repeated meetings at all possible levels.

There are valid reasons for terminating the contract and now we would go ahead with fresh tender to speed up the project, Sachan said.

Eastern DFC will mostly have double tracks and will be electrified but the 400 km section from Ludhiana to Khurja in Uttar Pradesh will be single line electrified due to lack of space.

The DFC project is crucial for the country as it aims to divert chunks of goods traffic from the road to rail with faster movement on dedicated routes.

Though there was resentment against the growing involvement of Chinese companies in Indian economy, the face-off in the Ladakh region which claimed the lives of 20 Indian soldiers has now become the flash point for decisive action on the economic front.

Besides DFC, involvement of Chinese in other possible areas in the rail sector are also slated to join the move to boot out the dragon as India is mulling economic measures to counter Beijing in a befitting manner.