Eastern Dedicated Freight Corridor: DFCCIL Files Rs 234-crore Counter Claim Against Chinese Firm After Contract Termination

Indian Railway-owned Dedicated Freight Corridor Corporation on Friday filed a counter-claim of Rs 234.25 crore against China Railway Signalling and Communication (CRSC) Research and Design Institute which has approached an international tribunal claiming damages to the tune of Rs 443.77 crore after its contract was terminated two years ago.

In July 2020, DFCCIL terminated the contract with the Chinese firm worth Rs 471 crore for signalling on 417-km stretch between Kanpur and Mughalsarai (now Deen Dayal Upadhyay) stations in UP for the Eastern Dedicated Freight Corridor (EDFC) . DFFCIL cited poor progress and non-performance as the reason for terminating the contract. The contract was terminated at the peak of the border dispute between the neighbours in Ladakh

The project was awarded to the CRSC in 2016 for the signalling and telecommunication work in 417 km stretch of EDFC.

According to the DFCCIL officials, even after four years, the progress in the project was only 20 per cent. DFCCIL officials decided to terminate the project given the reluctance of the company to furnish technical documents, as per the contract agreement, such as logic design of electronic interlocking, non-availability of their engineers and authorised personnel at the site was a serious constraint. DFFCIL also charged that Chinese firm failed to strike tie-ups with local agencies which harmed the physical progress of the work, they said.

Senior advocate Harish Salve has been nominated as arbitrator member from DFCCIL.

While the Chinese firm had initially filed a claim of Rs 279 crore in January 2021, it has now submitted it statement of claim (SOC) with a revised claim of Rs 443.77 crore.

The Chinese firm had earlier filed a petition in the Delhi High Court in 2020 challenging the contract termination. The court's order was in favour of DFCCIL. The Chinese firm had challenged the order before a division bench of the Delhi High Court but to no avail.

The Chinese company has said DFCCIL owes it in lieu of the work already completed by it under the contract, payment for which has not been made. It also alleged violation of contract provisions by DFCCIL.

DFCCIL, in its counter-claim, has raised the issue of recovery of mobilization advance, retention money and balance under the termination clauses apart from the regularisation of forfeiture of the bank guarantee, the officials said.

The submissions from both the parties will now be presented before the international tribunal before a decision can be taken on the matter.

Currently, the railways is working with Chinese firms and recently it awarded multiple contracts to TZ (Taizhong) Hong Kong International Limited, the international trading arm of Taiyuan Heavy Machinery Group Co. Ltd, a state-owned enterprise with direct links to the Chinese government. However, neither the CRSC Research and Design Institute nor any other Chinese firm is engaged in any other projects in DFCCIL.

(With Inputs From PTI)