Railways Terminates Contract With Chinese Company as Calls to Boycott 'Made in China'

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 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. They were supposed to complete the work by 2019, but only 20 per cent of the work has been completed so far, said the Railways.

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.

Officials, however, said it was poor performance and inability to deliver the project on time that led to the decision by the implementing agency, the Dedicated Freight Corridor Corporation Limited (DFCCIL), to terminate the contract. They said the DFCCIL has already applied to the World Bank, which is the funding agency, to initiate the process.

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," they 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.

The Department of Telecommunications on Wednesday also reportedly asked companies to consider reviewing future partnership with Chinese companies like Huawei & ZTE.

A News report quoted telecom sources to say that existing deals are unlikely to be affected but 5G trial partnerships could bear the impact. The standoff has stirred anti-China sentiments in India, with protesters and some trade bodies like CAIT calling for a boycott of Chinese products in protest. Reports quoting sources in the telecom department had said it has been decided that state-owned BSNL will be asked not to use Chinese equipment to upgrade its 4G network, which is being supported by its revival package.

India and China are holding the second round of Major General-level talks on Thursday, a day after the dialogue in Galwan Valley in Ladakh, the site of a violent face-off between the two armies, ended on an “inconclusive” note. The violent clashes on Monday night, which left at least 20 soldiers of the Indian Army dead, are the biggest confrontation between the two militaries after their 1967 clashes in Nathu La in 1967 when India lost around 80 soldiers while more than 300 Chinese army personnel were killed.

External Affairs Minister S Jaishankar, in a telephonic conversation with his Chinese counterpart Wang Yi, said the “unprecedented” development will have a “serious impact” on the bilateral ties, holding the Chinese army responsible for the violence by taking “premeditated” action.