Border issue not behind cancellation of contract with China: Railway PSU

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.

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.

However, the Dedicated Freight Corridor Corporation Limited (DFCCIL), the implementing agency of the project, made it clear that there was no link between the border face-off and the contract's termination, the process for which had started as early as January 2019.

Officials said the Chinese firm was supposed to complete the work by 2019, but only 20 percent of the work has been completed so far.

"We were in discussion with the World Bank on the issue since January this year as their progress was very slow. We approached them in April telling them of our decision to terminate the contract. We have decided to terminate the contract and if the World Bank disagrees, then we will approach the Railways to fund the section.

"There is no link between the termination of this contract and what is happening at the borders. It is purely coincidental," said Anurag Sachan, Managing Director, DFCCIL.

Sachan said 60 per cent of the track linking work (being done by another contractor) on the section has been completed and the delay in completion was because the Chinese firm did not do their part of the work.

"If they had done their work the section would have been completed by this financial year, he said.

Sachan, however, said it was poor performance and inability to deliver the project on time that led to the decision by DFCCIL to terminate the contract.

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.