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Indian Railways cancels Rs 471 crore signalling contract to China firm

Sending a clear message to China, the government today said it was decided by Dedicated Freight Corridor Corporation of India (DFCCIL) to terminate the contract with Beijing National Railway Research and Design Institute of Signal and Communication Group Co Ltd

Nirbhay Kumar | June 18, 2020 | Updated 18:03 IST
Indian Railways cancels Rs 471 crore signalling contract to China firm
A day earlier, the government asked state-owned BSNL, MTNL and other private telcos to not use Chinese-made equipment in the upgradation of 4G facilities in view of security threats

KEY HIGHLIGHTS

  • A Rs 471 crore signalling project awarded by Dedicated Freight Corridor Corporation of India Limited (DFCCIL) to China Railway Signal & Communication Co. Ltd (CRSC) is set to be the major casualty of the violent border tensions with China
  • In view of the poor progress, DFCCIL has decided to terminate the contract. The contract had been awarded in 2016 but in the last four years only 20% of the works have been completed
  • Since the project is funded through World Bank, DFCCIL will seek consent of the international financial institution before going ahead with the termination
  • Non-availability of their engineers at site was a serious constraint. Further, physical progress did not move forward as they did not have tie up with local agencies
  • The scope of proposed work included signalling and telecommunication work in Kanpur-Deen Dayal Upadhyay (DDU) section (417 kms) of the freight corridor

With the 'Boycott China' chorus stronger than ever after a pre-planned attack on Indian soldiers by the Chinese troops in the Galwan valley of Ladakh, a Chinese engineering company has lost a major contract with the Indian railways. A day earlier, the government asked state-owned BSNL, MTNL and other private telcos to not use Chinese-made equipment in the upgradation of 4G facilities in view of security threats.

Sending a clear message to China, the government today said it was decided by Dedicated Freight Corridor Corporation of India (DFCCIL) to terminate the contract with Beijing National Railway Research and Design Institute of Signal and Communication Group Co Ltd. The Chinese company had secured a contract for designing and installing signal and telecommunication network for the 417-km DEFRC segment between Kanpur and Deen Dayal Upadhyaya Station (Mughal Serai junction) in UP.

The Railways had awarded the contract four years ago, and the Chinese company was a lone entry for a Chinese presence in the mega project. Since the project is funded through World Bank, DFCCIL will seek consent of the international financial institution before going ahead with the termination.

The railways has said the non-availability of their engineers at site was a serious constraint. Further, physical progress did not move forward as they did not have tie up with local agencies.

A senior railways ministry official said the signal and telecommunication systems are used for interlocking railway sections. The software and security codes are the key for operating or correcting errors. Railways officials have cited its refusal to share technical details and codes as reason for its eviction. As per a railways ministry official, after a series of meetings the company shared the details, which were "incoherent and incomplete".

Other issues cited as reasons for the company's eviction include "non-availability of engineers at site; no progress in physical work; no material procurement work; and no progress in work despite several meetings.

Also read: India-China face-off: Stop using Chinese equipment, Govt tells telcos

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