Delhi Metro's Phase-III may be delayed by Rs 4,000-crore deal

The controversial Rs 4,000-crore deal for purchasing new train coaches from Hyundai Rotem may derail the ambitious phase-III project of the Delhi Metro. Urban Development Minister M. Venkaiah Naidu has asked the department to take a call on imposing penalty on the private firm, which allegedly bagged the contract by hiding crucial information during the tender Metro's Phase-III may hit red signal process.

Official sources said the ministry was exploring all options, including cancellation of contract awarded to the Hyundai Rotem consortium. Terminating the contract would stall the supply of trains and result in inordinate delay of execution of the phase-III project, which is already running behind by nearly a year.

Sources said cancellation of the contract would necessitate appointing a new contractor that will be a time-taking process.

"The urban development minister has directed officials to decide on imposing penalty on the contractor (Hyundai Rotem) within a week. This could either be heavy monetary penalty, forfeiture of security deposit or even termination of the contract," said an official.

Sources said the ministry has taken a strong view against encouraging such malpractices.

Cancellation of contract at this stage would derail the phase-III project that is over 65 per cent complete. Sources added the UD ministry was keen on cancellation of the contract as any leniency will send a wrong message.

The case relates to the contract bagged by Hyundai Rotem for supply of 486 train coaches. It was alleged that the firm was blacklisted by the Airports Authority of India for violating tender conditions.

The Delhi Metro awarded the contract to the South Korean company despite it quoting higher price for the coaches. Tender rules and conditions set by the funding agency, Japan International Cooperation Agency (JICA) say the contract will be cancelled if at any stage it comes to light that a company secured the contract by furnishing fraudulent information.

After the contract was awarded to Hyundai Rotem in April 2013, an inquiry committee under former economic affairs secretary R. Gopalan was set up by the ministry which indicted DMRC for lack of transparency in the tender process. "It came to the notice of Delhi Metro that Hyundai Rotem company has concealed the fact that their company has been debarred by a government agency in their submission to DMRC against the Rolling Stock tender related to phase-III project. The matter is now under consideration of the UD ministry," a Delhi Metro official said. DMRC has also asked the private firm to submit a clarification in this regard.

It may be noted that the Delhi Metro placed the order for 486 metro coaches (81 train sets of six coaches each) for its phase-III project. The DMRC plans to introduce driverless trains for the first time.

Colourful interiors, improved passenger safety and information system and more seating space are the key features of the new rolling stock. The new coaches will be brighter with varying seat colours like pink, red and purple. As per the agreement, initially 20 train sets (120 coaches) will come from South Korea while the remaining 61 train sets (366 coaches) will be manufactured in Bengaluru.

(Courtesy: Mail Today)