Chinese Firm Sues Indian Railways For Terminating Rs 471 Crore World Bank Project

A controversial Chinese firm has sued Indian Railways for terminating a Rs 471 crore World Bank funded project. The move is in retaliation to Indian Railways canceling the construction contract of a Chinese company for a signalling and telecommunication project for the freight corridors. The company was held responsible for the third deadliest high-speed rail disaster in history, which claimed the lives of 40 people. This serious traffic disaster was caused by the critical defects of design by the company Indian Railways hired in 2016.

Chinese Firm Sues Indian Railways
Chinese Firm Sues Indian Railways For Terminating Rs 471 Crore World Bank Project

Chinese firm sues Indian Railways

On Friday, it was reported that a PSU under Piyush Goyal-chaired Railway Ministry terminated the contract of a Chinese company regarding signalling and telecommunications work on the DFCCIL’s Eastern Dedicated Freight Corridor (DFC) citing the poor progress of work.

The work was to be accomplished on a 417 km long section of the Eastern DFC corridor that was between Kanpur and Mughalsarai.

This DFC project, presently encompasses two corridors Eastern DFC and Western DFC. Currently, this project is being carried out by the DFCCIL (Dedicated Freight Corridor Corporation of India) Limited.

Anurag Sachan, the Managing Director of DFCCIL, said that the termination letter was issued to China’s Beijing National Railway Research & Design Institute of Signal & Communication company. This letter was handed out after a 14-day notice.

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In 2016, the Chinese company, bagged the contract, estimated to be worth Rs 471 crore. It is in retaliation to the termination of this contract that the Chinese firm responded by dragging the national transporter to court.

It was in January 2019, that the process to kick out the Chinese company from the DFC project had started. The reason for this was simply because the firm had ceased to function to finish its work within the allotted time period. Until then, the Chinese company had only managed to finish 20 per cent of the work.

Wenzhou Train Collision

What was not reported by the mainstream media about the Chinese company was that it was held responsible for the third deadliest high-speed rail collision in history. The Wenzhou train collision occurred on 23 July 2011 when two high-speed trains travelling on the Yongtaiwen railway line collided on a viaduct in the suburbs of Wenzhou, Zhejiang province, People’s Republic of China. The two trains derailed each other, and four cars fell off the viaduct. 40 people were killed.

Wenzhou Train Collision
The company was held responsible for Wenzhou Train Collision – the third deadliest high-speed rail disaster in history, which claimed the lives of 40 people. This serious traffic disaster was caused by the critical defects of design by the company Indian Railways hired in 2016.

High speed was not a factor in the accident, however, since neither train was moving faster than 99 km/h (62 mph), a moderate speed for a passenger train. According to the investigation report, the accident occurred due to severe defects in the design of control center equipment, lax equipment inspection and failure to adequately respond to equipment malfunction caused by lightning.

The report assigns fault to executives and engineers of the China Railway Signal & Communications Corp. (CRSC), which designed, produced and installed the defective equipment. The Beijing National Railway Research & Design Institute of Signal & Communication contracted by Indian Railways is a subsidiary of CRSC.

World Bank approached

After terminating the Chinese contract the work on the actual project began in the month of April this year. The project executing company, DFCCIL had approached the World Bank. As of now, it is the World Bank which is funding the DFC project.

According to Sachan, DFCCIL has terminated the contract considering the poor progress made by the Chinese company. The Chinese firm’s poor response led to the immense delay in the work, so the DFCCIL has terminated the contract. The DFCCIL is yet to obtain the NOC from the World Bank, however, the corporation has conveyed to the World Bank that it is in fact, terminating the contract of the Chinese company and will fund the works on its own, he added.

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