July 25, 2005	Monday	Jumadi-us-Sani 17, 1426

Please Visit our Sponsor (Ads open in separate window).

LAHORE, July 24: The China National Machinery Import and Export Corporation has asked the Pakistan Railways to seriously reconsider the implications of withdrawing the modern signalling project’s Letter of Intent (LoI), it is learnt.

Sources quoted the CMC as having told the PR high-ups that the corporation “would not hesitate to take appropriate legal action if the Pakistan Railways ignored the valid and enforceable agreement for an award of contract, signed in the presence of President Gen Pervez Musharraf and his Chinese counterpart Hu Jintao in Beijing on July 3, 2003.

“The agreement has been regarded as a significant development in the economic cooperation between Beijing and Islamabad and its unilateral withdrawal and intended action of calling for fresh tenders, which if taken, would have a substantial impact, both from a commercial viewpoint and on a broader political viewpoint,” the sources quoted a CMC letter received in the railways ministry recently.

The agreement was singed after several rounds of bidding and evaluation of tenders, the sources said. The financial package for the project was revised to the extent of the satisfaction of the Pakistan side in June 2004 through negotiations between the CMC and Islamabad on the request of the Finance Ministry for reducing the interest.

The CMC also agreed to extend the project period from four to six years in line with the budgetary constraints of the PR while the value of the LoI was to remain US$111 million.

Under the two-phase project, the CMC was to provide electronic interlocking at stations and auto-block on double line from Rohri to Shahdara and semi-automatic block on single line from Lodhran to Khanewal.

The Rohri to Khanewal phase was to be completed within three-and-a-half to four years while the Khanewal to Shahdara phase was to be accomplished within two to three years. The Rohri to Mirpur Mathelo section within the phase I was to be completed first to undergo a one-year trial period without affecting the continuation of ongoing installation activities. According to a senior railway officer who was involved in the bidding process, the project not only included computer interlocking within the perimeters of large railway stations but also for the first time in the main line outside the stations would have automatic train control or operations.

At least 250 locomotives for main line operations were to be equipped with cab signalling equipment as part of the auto-block system (ABS) on main line among 65 stations from Rohri to Lahore.

“The system included full automation of the track control, level crossings and even auto-braking of locomotives in case the driver fails to observe the electronic cautions of conditions on tracks ahead,” he said.

“The automatic train control (ATC) on main lines outside and inside stations is a critical protection against overshoot of a train and minimizes the chances of human error. The recent fatal accident at the Sarhad railway station is a system failure and not a simple case of human error,” the officer said.

Railway officials said the introduction of modern signalling system had not been shelved but was being implemented in phases according to the importance and urgency of each section from an operational or safety point of view.

The work on modern signalling system would shortly be undertaken, the railway officials said and added that the CMC costs were excessive and that new priority and phasing led to the cancellation of the LoI.

The CMC letter said though the reasons were not valid grounds for the Pakistan Railway to pull out, the corporation was ready to assist it in ascertaining practical solutions on how to accommodate its difficulties.

“If the PR were to proceed to unilaterally withdraw the LOI or to call for fresh tenders, that would amount to a fundamental breach of the agreement and of the rights and obligations of parties to a valid enforceable agreement.

“The solutions, once agreed upon by both parties, should then be implemented by proper and legal means, for two major reasons. Firstly, it cannot be disputed that there is in force a valid enforceable agreement between the CMC and the PR.

“Secondly, after the execution of the LoI and the agreement, both parties have proceeded on the common understanding that there was a valid enforceable agreement.

“In addition, on the active encouragement of the PR, the CMC has (to PR’s knowledge) invested a substantial amount of time, effort and money on tasks such as the finalization of technical details in the specifications and drawings, preparation of design, site surveys, selection of equipment and suppliers over a period of about two years.

“These activities are just not normally undertaken (and to such an extent) without the existence of a valid enforceable agreement,” the letter said.

However, the CMC hoped that the PR would confirm immediately that the withdrawal of the LOI had no effect. It was also optimistic that the PR’s intentions to re-tender would not manifest itself into actions that would lead to an irreparable damage with serious implications for both the parties.

Please Visit our Sponsor (Ads open in separate window)