Rapid rail AC order to China firm under DPIIT scanner

The Department for Promotion of Industry and Internal Trade (DPIIT) is likely to review the award of air conditioning contract for metro cars for the Delhi-Meerut Rapid Regional Transport System (RRTS) to a Chinese company for any possible violation of the Make in India guidelines.

The project is being developed by the National Capital Region Transport Corporation (NCRTC). Bombardier is supplying the metro cars while the air conditioning contract has gone to a Chinese company KING.

Home-grown air conditioning company Sidwal Refrigeration Industries Private Limited raised the matter with the department alleging that a Chinese vendor was roped in despite indigenous Heating, Ventilation and Air-Conditioner (HVAC) products being available.

“In the case of RRTS project, when the fully indigenously developed HVAC are available ,the car builder Bombardier has decided to go with Chinese vendor KING despite lot of local industries are available in India,” Sidwal Refrigeration Industries Private Limited said in a letter to the DPIIT earlier this year.

While NCRTC has maintained that the contract was awarded to the Chinese company before a government order in July last year mandated procurement of items locally where enough domestic capacity was available, officials said that the DPIIT will still look into the case since a Chinese entity is involved.

“We will look into the issue,” said an official, adding that a meeting on the matter is likely soon.

An email sent to the commerce and industry didn’t elicit a response.

HVAC is mentioned in the list of ‘Mandatory Items’ issued by the Ministry of Housing and Urban Affairs (MoHUA) where there is sufficient local capacity and competition and where public procurement needs be done only from local suppliers in terms of PPP-Mll Order.

“As the item HVAC is also in the list, these guidelines are also applicable for procurement of HVAC for rolling stock of Delhi-Meerut RRTS project,” MoHUA said in a letter to DPIIT dated May 20, 2021.

However, referring to the finance ministry order dated July 23, 2020 concerning procurement from countries sharing land border with India including procurement from China, NCRTC said it does not apply to the contracts already awarded and hence it does not apply to RRTS trainset contract as it was awarded in May 2020.

A record of discussion held between DPIIT, NCRTC, and MoHUA on March 22 said, “notification of MoHUA dated May 5,2020 was issued much after opening of the tender of Rolling stock. Hence this could not be included in the NIT of NCRTC for procurement of rolling stock.”

Being a public procurement under Make-in-India, Bombardier India will be required to meet the minimum local content requirement under this contract, NCRTC said in response to a query from ET.

However, procurement of the sub-systems or components by Bombardier India are private procurement and therefore the decision of such procurement rests with Bombardier India meeting the overall performance requirement under this turnkey contract, it said.

NCRTC also said that the issue of HVAC procurement by Bombardier India under the subject contract has already been discussed with DPIIT and has been found in compliance with all applicable government guidelines and conditions of the contract. “All decisions under the contract have been taken following all the applicable guidelines of the government of India,” an NCRTC spokesperson told ET.

Last year, Chinese firm Shanghai Tunnel Engineering Company Ltd (STEC) bagged a contract to design and construct a 5.6 km underground section between New Ashok Nagar and Sahibabad on Delhi-Ghaziabad-Meerut RRTS Corridor of NCRTC.

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