The contract had earlier been awarded in 2016 for the purpose of signalling and telecommunication work across over 400 km of railway tracks

Chinese companies in India are set to lose out on the business as the first set of actions has been initiated from the Indian side in the aftermath of the fresh animosity between the two nations The Indian Railways has started the process of cancelling contracts with Chinese firms that were awarded earlier and is instead keen on handing these out to Indian counterparts, sources said.

This comes in the aftermath of at least 20 Indian Army personnel, including a Colonel rank officer, losing their lives in the violent face-off in the Galwan Valley area of Ladakh on June 15.

According to sources, the Dedicated Freight Corridor Corporation of India Limited (DFCCIL) is set to terminate the contracts of Chinese behemoth Beijing National Railway Research & Design Institute of Signal & Communication Group Co. Ltd. The contract had earlier been awarded in 2016 for the purpose of signalling and telecommunication work across over 400 km of railway tracks.

This contract, worth Rs 471 crore (funded through a loan from the World Bank) involved signalling and telecommunication work in the Kanpur-Deen Dayal Upadhyay (DDU) section in Uttar Pradesh, which spans 417 km.

It is learned that the DFCCIL is dissatisfied with the poor progress (about 20%) of the project, despite it having been over 4 years since the contract was handed. In its notice, the DFCCIL also listed other issues with the Chinese firm, including the reluctance of the company to furnish technical documents and non-availability of the firm's engineers or authorized personnel at the site.

Physical work could also not progress because the Chinese firm had no tie-up with the local agencies. There had also been no improvement in progress despite repeated meetings with the firm at every possible level, the DFCCIL stated.

Therefore, it was decided that the contract awarded to the Chinese company will be terminated. The DFCCIL, however, did not attribute the cause for such to the recent de-escalation of tensions between India and China following the Galwan valley face-off and had no mention of it.