Indian Railways to cancel Chinese firm's contract in Dedicated Freight Corridor amid India-China faceoff

New Delhi: Following the violent clashes between Indian and Chinese troops at the Galwan Valley in the east of Ladakh along the Line of Actual Control (LAC) on June 15 night, Indian Railways on Thursday (June 18) embarked upon the process to cancel the contracts given to Chinese companies in the Dedicated Freight Corridor (DFC). 

According to sources, the Dedicated Freight Corridor Corporation of India (DFCCIL) has commenced the process to cancel the contract given to Beijing National Railway Research & Design Institute of Signal & Communication Group.

The Chinese firm was awarded the contract awarded in June 2016 for Signalling & Telecommunication work worth Rs 471 crore in Kanpur-Deen Dayal Upadhyay (DDU) section for 417 kms. The contract cost was funded through a loan from the World Bank.  

Notably, the progress in the work is a mere 20% despite the passage of 4 years. The issues cited for cancellation of the contract are due to "reluctance of the company to furnish technical documents, as per contract agreement, such as logic design of electronic interlocking."

Other issues involved: "Non-availability of their Engineers/authorized personnel at the site was serious constraint; Physical work could not progress as they have no tie-up with the local agencies; Material procurement, which is an independent activity, has not been done earnestly."

Finding that "There is no improvement in progress despite repeated meetings with them at every possible level," DFCCIL has decided to terminate this contract. 

Earlier on Wednesday, the Department of Telecom (DoT) asked state-owned Bharat Sanchar Nigam Ltd (BSNL) to not use Chinese telecom equipment during its 4G upgradation.

A similar message has also been conveyed to Mahanagar Telephone Nigam Ltd (MTNL) to avoid the use of Chinese equipment for upgradation.