Published On: Thu, Jul 30th, 2020

REC arm cancels contract to Indian subsidiary of Chinese firm

New Delhi: Days after the Congress accused the government of engaging a China-linked company in a meter installation project in Jammu & Kashmir, the REC Power Distribution Company Ltd (RECPDCL) said that sub-contractor, Dongfang Electric (India) Pvt Ltd, which was a subsidiary of a Chinese company, has been removed.

It may also be noted that the award of this contract was finalised about a year ago

In a statement, the company said that the principal contractor of smart metering project has removed the sub-contractor concerned.

Dongfang Electric (India) was registered and set up in Kolkata in 2008, under Indian Companies Act of 1956. It is a wholly-owned subsidiary by Dongfang Electric Corporation China Ltd, said the company website.

The project for installation of over 1 lakh smart meters was awarded to Techno Electric & Engineering Co. Ltd, an Indian company in September 2019, the RECPDCL said.

It added that a smart metering project has mainly four components – ‘Meter, RF Communication, MDM and System Integrator’. The successful bidder, Techno Electric, and all its sub-contractors for different components are companies registered in India.

“It may also be noted that the award of this contract was finalised about a year ago and therefore linking it to a subsequent development is wrong and smacks of bias. The company is committed to follow the law of the land in letter and spirit,” it said.

The subsidiary of the power financing firm Rural Electrification Corporation noted that the decision was taken in view of recent government order regarding concern for the security of power supply system in case of a cyber attack.

“In order to ensure the implementation of above instruction, now all new/ongoing contracts are being reviewed and as part of that review, one of the sub-contractors of the above project, which, though a company registered in India and having manufacturing facilities in India, was found to be a subsidiary of a Chinese company,” it said.

The said sub-contractor was directed to be removed from the project since its continuation would have led to the requirements of taking prior permission and testing every equipment supplied, thus leading to unacceptable delays in execution, the power discom said.

“It may be noted that some persons have given statements regarding the smart metering project being implemented in the UT of J&K by RECPDCL. They have not taken pain to ascertain the facts,” it added.

The statement comes just days after the Congress alleged that despite the government claiming that it has barred Chinese companies from working in India, the meter installation project in Jammu and Kashmir is being indirectly handled by the Chinese company which has worked in Pakistan also, referring to Dongfang.

Congress spokesperson Pawan Khera alleged that Dongfang company is active in various countries and has special relations with Pakistan. The company has worked in Pakistan’s Nandipur power project and is known for making software and hardware for Radio Frequency Technology.

RECPDCL is another state-run company to have cancelled contracts given to a Chinese company, in the wake of the recent border clashes at Ladakh, where 20 Indian soldiers and an unknown number of Chinese troops were killed.

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