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Railways to terminate contract with Beijing firm, World Bank’s nod sought
To be clear, the decision to terminate the contract was taken in April due to “slow progress by the firm,” officials aware of the development said.
The ministry of railways on Thursday said its PSU, Dedicated Freight Corridor Corporation of India Limited (DFCCIL), has decided to terminate its contract with Chinese firm, Beijing National Railway Research & Design Institute of Signal & Communication, for work pertaining to signalling, citing delays.
To be clear, the decision to terminate the contract was taken in April due to “slow progress by the firm,” officials aware of the development said.
The contract was for signalling and telecommunication work at the Kanpur-Deen Dayal Upadhyay 417 KM long stretch on the Eastern Dedicated Freight corridor. The World Bank funded project is worth Rs 471 crore. The national carrier has also approached the World Bank for the same, Hindustan Times has learnt.
“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% work has been completed. We decided to terminate it and approached the world bank to grant us an NOC 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 as well,” DFCCIL Managing Director Anurag Sachan told HT.
For the contract to be terminated, a non-objection certificate (NOC) from the World Bank has to be granted as per its procurement regulations in investment project financing. For modification of signed contracts subject to prior review, the borrower shall seek the bank’s no objection before agreeing to terminate the contract, according to the regulations.
“In April, DFCCIL brought to the Bank’s notice delays in implementation of this contract. 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.
The announcement by the railway ministry comes amid escalation of the border conflict with China triggered following Monday night’s face-off in Galwan Valley along the Line of Actual Control (LAC).
DFCCIL has decided to terminate it due to “very poor performance of the company”, a railway ministry spokesperson said.
Only 20% of the work had been completed “despite passage of four years” DFCCIL said in its termination notice. In view of poor progress it is decided by DFCCIL to terminate this contract, it said.
The company was reluctant to furnish technical documents, the railways PSU said citing the reasons for the termination of the contract.
“Non availability of the engineers/authorised personnel was a serious issue,” it said.
Physical work on the project also could not progress as they have no tie up with the local agencies, DCCIL mentioned. “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 Indian Railways’ quadrilateral linking the four metropolitan cities of Delhi, Mumbai, Chennai and Howrah, commonly known as the Golden Quadrilateral.
The Dedicated Freight Corridor Corporation of India (DFCCIL) aims to decongest up to 70 % freight load of the Indian Railways to decongest its network for running passenger trains as well.
India has been mulling economic measures, including limiting China’s access to its market.
On Wednesday, the ministry of housing and urban affairs said it has not finalised a contract with a Chinese firm for construction of an underground stretch of Delhi Meerut RRTS (Regional Rapid transit System) project after it emerged as the lowest bidder at Rs 1126 crore.
“The tender is under process and yet to be finalised. The ADB/World Bank/Multi-lateral procurement guidelines do not allow discrimination among firms/ countries,” it said.
