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Chinese firm sues Indian Rlys for Rs470 crore lost contract

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The Chinese engineering firm with which the Indian Railways ended its Rs470 crore signaling contract has moved the Delhi High Court in this connection.

The firm, a subsidiary of China Railway Signal and Communication Corporation (CRSC), won the contract to provide signaling work on the 400km railway line between New Bhaupur and Mughalsarai section.

The Indian Express reported that the Railways served the company its formal termination letter on Friday.

It said the Chinese company moved the Delhi High Court to prevent the DFCCIL from encashing its bank guarantee.

The newspaper quoted a top official of the Dedicated Freight Corridor Corporation of India Limited (DFCCIL) as saying that the termination letter was served on Friday and the company would like the work to go to some Indian firms.

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The report said the World Bank, which is funding the Eastern Dedicated Freight Corridor, has not given a no-objection certificate for the termination but the Railways plan to fund the project on its own.

The Railways ended the deal with the Chinese firm citing delay in execution as only 20% of the work was completed since the contract was given in 2016.

The move to bar the Chinese company came during the India-China standoff in Ladakh and was seen as a fallout of the same.