Amid the violent face-off between India and China at the Galwan Valley in the east of Ladakh, the Indian Railways has decided to cancel a key contract given to a Chinese company in the Dedicated Freight Corridor (DFC). For this, the government has already approached the funding agency, World Bank, seeking termination of the contract citing poor progress.
On Thursday, the national Transporter stated that a decision has been taken to cancel the Rs 471-crore signalling and telecommunication work for a stretch of 417 km in Kanpur-Deen Dayal Upadhyay (DDU) section. The cost of the contract was funded through a loan from World Bank. In World Bank-funded projects, a nod from the global agency is needed for cancellation of any contract .
Though the contract was awarded in 2016, the progress of the project was a mere 20 per cent, affecting the overall completion deadlines of the DFC, which prompted the Railways to think about its cancellation for almost two months now. However, the flare-up at the border seems to have speeded up the termination.
The reasons that the Dedicated Freight Corridor Corporation (DFCCIL) showed include reluctance by the company to furnish technical documents like logic design of electronic interlocking, non-availability of engineers at the site, delay in the progress of physical work as they were not having a tie-up with any local agencies, delay in material procurement and no progress in work despite repeated meeting with the company.
“In view of poor progress, it is decided by the DFCCIL to terminate this contract,” said a railways document, citing the reasons for cancellation. While Eastern DFC (Mughalsarai-Allahabad-Kanpur-Khurja-Dadri- & Khurja-Ludhiana) is being funded by the World Bank through a loan of Rs 13,625 crore, Japan International Cooperation Agency (JICA) is providing debt of Rs 38,722 crore for the western DFC project. The total project cost for Eastern DFC comes to around Rs 30,358 crore, while that of Western DFC is around Rs 51,101 crore. According to the Railways sources, if the World Bank decides not to terminate the project, the government may consider funding the project by itself.
This comes amid ongoing talks between the World Bank and the Railways for funding the last leg of the Eastern Dedicated Freight Corridor (EDFC) between Sonnagar in Bihar to Dankuni in West Bengal. The 538-km stretch, estimated to cost Rs 15,000 crore, was supposed to come in public-private partnership mode.
After the killing of 20 Indian soldiers by the Chinese army, there were demands from various corners including industry bodies to ban Chinese goods and take tough economic measures against China. The Department of Telecom (DoT) has already asked Bharat Sanchar Nigam (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL) to not use Chinese telecom equipment during its 4G upgradation.