Delay costs Kolkata's ride on Spanish Metro

Contract for 14 rakes with Spanish train maker terminated

Kolkata’s dream to get world-class Metro rail has been derailed, at least for now. The Rs 780-crore manufacturing contract of the Kolkata Metro Railway Corporation Ltd (KMRC) project for 14 rakes with Spain’s Construcciones y Auxiliar de Ferrocarriles (CAF), one of the world’s leading train maker, has been terminated.

“The contract has been terminated due to technical issues last month. KMRC is in the process of floating a fresh tender for the rakes,” an official said, without divulging further details.

Japanese Bank of International Cooperation (JBIC), which is funding 45 per cent of project cost of the budgeted Rs 4,875 crore for a new Metro  east-west corridor in the city,  has been informed about the termination of the contract.

There is already a north-south metro corridor in Kolkata.

KMRCL, initially a joint venture between the Union urban development ministry and the West Bengal government, is developing the metro project that will connect Salt Lake on the eastern fringe of Kolkata to Howrah, the township to the west of Kolkata, on the other side of Hoogly river.

In 2013, following a request from West Bengal Chief Minister Mamata Banerjee, the project was handed over to Indian Railways, which runs the existing metro services in Kolkata.

The fourth largest train maker in the world, CAF, had bagged the order to manufacture 14 rakes (each rake consisting of six coaches) for KMRCL in 2012, participating in a first-of-its-kind international bidding by Indian Railways for Metro coaches.

When contacted Vishal Khetrapaul, director, CAF India, a wholly-owned subsidiary of the Spanish major, did not comment on the termination of the contract. “We are a listed entity in Spain. I can not comment on this,” he told Business Standard.

The existing Kolkata Metro, country’s first underground mass transit system, is dependent on the Railways’ Integral Coach Factory at Perambur (near Chennai) for rolling stock.

Though Railway officials claimed the contract was terminated due to “technical reasons”, sources cited the year-long delay in the implementation of the project for loss of interest in CAF’s contract.

At the time of bidding, it was decided that CAF would get the rakes manufactured in Spain and would deliver by 2014-end, which was the deadline for commissioning the project. However, as the the project has hit land hurdles, with state-government

“As per the standard procedures KMRC was to pay an advance of about 10 per cent of contract value to CAF. But that was not released and there was a cost escalation demand from the CAF. Even after that the contract could have been executed, but CAF seems to have lost interest as the project has hardly moved forward in the last two years,” another official said.

Work on the project that aims to connect Salt Lake Sector V with Howrah Maidan got stuck in land knots at Bowbazar and BBD Bag in central Kolkata and Duttabad in Salt Lake. Some residents who need to be relocated had moved court.

The West Bengal government so far maintained a hand-off approach, which has made it difficult for KMRC to resolve the issue.

The Calcutta High Court recently directed to set up a committee comprising representatives from KMRC, the state government, police and railways to resolve the issues and implement the project.

LAND ACQUISITION HURDLE DELAYS PROJECT

• SETBACK: The contract between KMRC and CAF for 14 rakes has been cancelled
   
• REASON: Officials maintain it is “technical”. But sources claim more than a year’s delay in the project has led to the loss of interest from the Spanish train maker
   
• CAUSE OF DELAY: Hurdles in land acquisition, as some people who need to be relocated have moved court
  

 

STATUS: Project delayed. Court has ordered the formation of a committee to resolve the issue