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A South Korean company has supplied 10 locomotives to Bangladesh Railway allegedly violating some clauses of the contract, creating an impasse over the official handover of the train engines.
The locomotives have been lying idle at a railways workshop in Chattogram's Pahartoli for the last four months. It has happened when the BR is struggling to run its operation with a huge number of outdated engines.
The metre-gauge diesel electric locomotives -- bought under a project worth around Tk 300 crore -- arrived at the workshop after they were unloaded at the Chattogram port early September.
Later in its report, a commissioning committee said the technical specifications of three capital components of the supplied locomotives did not match the specifications mentioned in the agreement.
Those components include alternators, compressors, and traction motors, show railway documents obtained by The Daily Star.
For example, the agreement sought alternator model TA12-CA9, but the South Korean company -- Hyundai Rotem Company (HRC) -- shipped alternator model TA9-12CA9SE, according to the documents.
Railways officials said the two models are different in terms of horsepower output.
Besides, as per a government plan, all the rail tracks in the country would be converted into dual gauge within a few years. The government had instructed the BR to purchase locomotives which could be used on both metre-gauge and broad-gauge by changing the undercarriages.
But with the TA9-12CA9SE alternator, the locomotives will not run on broad-gauge, said the officials.
The HRC handed the locomotives also without any pre-shipment inspection (PSI), said the project director Nur Ahmed Hossain in a report.
He also said CCIC Singapore Pte Ltd -- employed by the railways for the inspection -- hid information and "some senior BR officials" joined hands in the unethical activity.
Under the circumstances, the project authorities halted payment for the locomotives, said railways sources.
After the engines arrived, the railways ministry in October formed a probe committee, led by Joint Secretary Faizur Rahman Faruqui, to ascertain whether those were handed as per the agreement.
Then on December 17, the project director (PD), in a letter to railways ministry's Secretary Salim Reza, accused BR Director General Md Shamsuzzaman and Additional Director General (Rolling Stock) Monjur-Ul-Alam Chowdhury of making moves to clear 65 percent of the remaining payment even before the probe was complete.
The Daily Star obtained a copy of the letter.
Contacted, the DG, however, claimed that the contract was not violated, rather the model of the alternator was changed for "design adaptation".
ALL CLAUSES NOT FOLLOWED
The BR signed the contract with the HRC on May 17, 2018 to procure the 10 locomotives for Tk 297.63 crore. This is one of three packages the BR is implementing under a project titled "Procurement of Locomotive, Relief Crane and Locomotive Simulator for Bangladesh Railway" with loan money from Asian Development Bank (ADB).
The aim of the project is to add new locomotives to the BR fleet as more than 70 percent of its train engines have already crossed their economic life, causing difficulties in railway's operations.
During the purchase, the BR hired CCIC Singapore Pte Ltd to check the quality of the imported locomotives as per the agreement.
"But from the beginning of the locomotive manufacturing till date, loco supplier M/S Hyundai Rotem Company and PSI M/S CCIC Singapore Pte Ltd did not implement all clauses of the contract properly," reads a document, which was shared by the project director among officials present at a meeting of the project implementation committee on December 3.
The manufacturer allegedly discouraged a BR team from visiting its factory showing various excuses and when it was finally invited, the Covid-19 pandemic hit South Korea, forcing the project authorities to rely on CCIC for the inspection, shows the document.
The CCIC did not send any pre-shipment inspection (PSI) report before the locomotives were dispatched from South Korea, it adds.
As per the agreement, the HRC was also supposed to supply testing equipment, such as a load box, for the commissioning of the locomotives, but the South Korean company did not hand the equipment.
Load box test is done to check the capability and performance of the engine by simulating the actual working condition of the locomotive at rated output, in static condition.
As the load box was absent, it was not possible to check the highest capability of the capital components of the locomotives. The highest speed of the locomotives is beyond the approved speed limit of the existing railway tracks and rolling stocks in Bangladesh.
"Thus, breach of contract and breach of LC have been done by M/S HRC and PSI-M/S CCIC," reads the document shared by the PD.
After the locomotives arrived, the project director decided not to unload them as the unloading would leave limited rooms for rectifying the faults. However, as per decision of the top authorities of the ministry and the BR, the project authorities unloaded the locomotives, said project officials.
The authorities have made 25 percent of the project's payment to the HRC, they said.
DG FOR MAKING PAYMENT
On December 3, BR DG Shamsuzzaman called a meeting of the project implementation committee allegedly without taking consent of the project director.
Apart from officials of the BR and the railways ministry, officials from some other ministries and agencies were present at the meeting, presided over by the DG.
As per the meeting minutes, deputy secretary (development-2) of the railways ministry said, "The discrepancy in horsepower of the alternator should be taken into cognisance and this is not acceptable."
A joint secretary of the railways ministry requested to take action as per the report of the committee formed at the directives of the railways minister, shows the minutes.
But the Additional Director General (RS) Monjur-Ul-Alam Chowdhury gave consent for using the locomotives. He, however, said: "Who is responsible for the supply of TA-9 model alternator, instead of TA-12, should be determined. The degree of technical deviation should also be considered."
Although the ADG gave consent for using the locomotives, he was made a member of the probe committee, said BR officials.
At the meeting, the DG pushed for paying 65 percent of the remaining payment. He said the remaining 10pc payment and another 10pc provided by the HRC as security deposit could be cleared upon completion of the warranty period and satisfactory performance of the locomotives.
He gave consent for receiving the locomotives on the basis of the commissioning report and making the locomotives operational.
The meeting decided that the probe committee would give its report as soon as possible.
Although the committee was asked to file the report within 15 working days, the written order on the committee's formation was issued more than 40 days after the railways minister asked for constituting the committee on October 13.
Buet Mechanical Engineering Department's Professor Muhammed Mahbubur Razzaque, the independent member of the three-member committee, said they started working in mid-December and expected to submit the report within the deadline.
"The terms of reference of our committee are very simple. We will just physically check whether there is any discrepancy in terms of elements supplied by the HRC and those mentioned in the agreement," he said.
In his letter to the railways secretary sent on December 17, Project Director Nur Ahmed Hossain also asked for cancelling the minutes of the project implementation committee meeting held on December 3.
The PD said opinions given by the committee members were distorted in the minutes.
He alleged the DG and ADG (RS) were assisting the supplier in getting the 65 percent payment, going against the public interests and by hiding the fraudulence of the supplier and pre-shipment inspector.
WHAT HRC AGENT, BR DG SAY
Roni Mostafa, proprietor of Golam Mostafa and Sons, the local agency of HRC for the project, said the project authorities had sought clarification from Hyundai and that they would give it.
However, it may take some time due to the Covid-19 situation and New Year holidays, he told The Daily Star on December 29.
Asked about the alleged violation of contract agreement, he said, "This is a highly technical issue. I don't want to make any comment on it."
Talking to The Daily Star on Thursday, BR DG Shamsuzzaman said they were aware about the changes in the alternator model.
He said even after receiving the 65 percent payment, Hyundai would still get 20pc payment, which remains due.
The difference of costs between the two types of alternators would not be more than 5 percent of the total contract cost and that could be covered from the remaining 20pc payment. "So, why won't we clear the 65 percent payment?" he questioned.
About the allegations over violation of the contract, he said, "This is not any violation of agreement. Rather the changes were made for design adaptation. TA-12 alternator is heavier than TA-9, which is used to decrease the axle load of locomotives."
Project Director Nur Ahmed, however, said as per the agreement, there was no scope to change the alternators, because, in that case, other competitors of the bidding would be able to challenge the procurement and bidding process.
www.thedailystar.net
The locomotives have been lying idle at a railways workshop in Chattogram's Pahartoli for the last four months. It has happened when the BR is struggling to run its operation with a huge number of outdated engines.
The metre-gauge diesel electric locomotives -- bought under a project worth around Tk 300 crore -- arrived at the workshop after they were unloaded at the Chattogram port early September.
Later in its report, a commissioning committee said the technical specifications of three capital components of the supplied locomotives did not match the specifications mentioned in the agreement.
Those components include alternators, compressors, and traction motors, show railway documents obtained by The Daily Star.
For example, the agreement sought alternator model TA12-CA9, but the South Korean company -- Hyundai Rotem Company (HRC) -- shipped alternator model TA9-12CA9SE, according to the documents.
Railways officials said the two models are different in terms of horsepower output.
Besides, as per a government plan, all the rail tracks in the country would be converted into dual gauge within a few years. The government had instructed the BR to purchase locomotives which could be used on both metre-gauge and broad-gauge by changing the undercarriages.
But with the TA9-12CA9SE alternator, the locomotives will not run on broad-gauge, said the officials.
The HRC handed the locomotives also without any pre-shipment inspection (PSI), said the project director Nur Ahmed Hossain in a report.
He also said CCIC Singapore Pte Ltd -- employed by the railways for the inspection -- hid information and "some senior BR officials" joined hands in the unethical activity.
Under the circumstances, the project authorities halted payment for the locomotives, said railways sources.
After the engines arrived, the railways ministry in October formed a probe committee, led by Joint Secretary Faizur Rahman Faruqui, to ascertain whether those were handed as per the agreement.
Then on December 17, the project director (PD), in a letter to railways ministry's Secretary Salim Reza, accused BR Director General Md Shamsuzzaman and Additional Director General (Rolling Stock) Monjur-Ul-Alam Chowdhury of making moves to clear 65 percent of the remaining payment even before the probe was complete.
The Daily Star obtained a copy of the letter.
Contacted, the DG, however, claimed that the contract was not violated, rather the model of the alternator was changed for "design adaptation".
ALL CLAUSES NOT FOLLOWED
The BR signed the contract with the HRC on May 17, 2018 to procure the 10 locomotives for Tk 297.63 crore. This is one of three packages the BR is implementing under a project titled "Procurement of Locomotive, Relief Crane and Locomotive Simulator for Bangladesh Railway" with loan money from Asian Development Bank (ADB).
The aim of the project is to add new locomotives to the BR fleet as more than 70 percent of its train engines have already crossed their economic life, causing difficulties in railway's operations.
During the purchase, the BR hired CCIC Singapore Pte Ltd to check the quality of the imported locomotives as per the agreement.
"But from the beginning of the locomotive manufacturing till date, loco supplier M/S Hyundai Rotem Company and PSI M/S CCIC Singapore Pte Ltd did not implement all clauses of the contract properly," reads a document, which was shared by the project director among officials present at a meeting of the project implementation committee on December 3.
The manufacturer allegedly discouraged a BR team from visiting its factory showing various excuses and when it was finally invited, the Covid-19 pandemic hit South Korea, forcing the project authorities to rely on CCIC for the inspection, shows the document.
The CCIC did not send any pre-shipment inspection (PSI) report before the locomotives were dispatched from South Korea, it adds.
As per the agreement, the HRC was also supposed to supply testing equipment, such as a load box, for the commissioning of the locomotives, but the South Korean company did not hand the equipment.
Load box test is done to check the capability and performance of the engine by simulating the actual working condition of the locomotive at rated output, in static condition.
As the load box was absent, it was not possible to check the highest capability of the capital components of the locomotives. The highest speed of the locomotives is beyond the approved speed limit of the existing railway tracks and rolling stocks in Bangladesh.
"Thus, breach of contract and breach of LC have been done by M/S HRC and PSI-M/S CCIC," reads the document shared by the PD.
After the locomotives arrived, the project director decided not to unload them as the unloading would leave limited rooms for rectifying the faults. However, as per decision of the top authorities of the ministry and the BR, the project authorities unloaded the locomotives, said project officials.
The authorities have made 25 percent of the project's payment to the HRC, they said.
DG FOR MAKING PAYMENT
On December 3, BR DG Shamsuzzaman called a meeting of the project implementation committee allegedly without taking consent of the project director.
Apart from officials of the BR and the railways ministry, officials from some other ministries and agencies were present at the meeting, presided over by the DG.
As per the meeting minutes, deputy secretary (development-2) of the railways ministry said, "The discrepancy in horsepower of the alternator should be taken into cognisance and this is not acceptable."
A joint secretary of the railways ministry requested to take action as per the report of the committee formed at the directives of the railways minister, shows the minutes.
But the Additional Director General (RS) Monjur-Ul-Alam Chowdhury gave consent for using the locomotives. He, however, said: "Who is responsible for the supply of TA-9 model alternator, instead of TA-12, should be determined. The degree of technical deviation should also be considered."
Although the ADG gave consent for using the locomotives, he was made a member of the probe committee, said BR officials.
At the meeting, the DG pushed for paying 65 percent of the remaining payment. He said the remaining 10pc payment and another 10pc provided by the HRC as security deposit could be cleared upon completion of the warranty period and satisfactory performance of the locomotives.
He gave consent for receiving the locomotives on the basis of the commissioning report and making the locomotives operational.
The meeting decided that the probe committee would give its report as soon as possible.
Although the committee was asked to file the report within 15 working days, the written order on the committee's formation was issued more than 40 days after the railways minister asked for constituting the committee on October 13.
Buet Mechanical Engineering Department's Professor Muhammed Mahbubur Razzaque, the independent member of the three-member committee, said they started working in mid-December and expected to submit the report within the deadline.
"The terms of reference of our committee are very simple. We will just physically check whether there is any discrepancy in terms of elements supplied by the HRC and those mentioned in the agreement," he said.
In his letter to the railways secretary sent on December 17, Project Director Nur Ahmed Hossain also asked for cancelling the minutes of the project implementation committee meeting held on December 3.
The PD said opinions given by the committee members were distorted in the minutes.
He alleged the DG and ADG (RS) were assisting the supplier in getting the 65 percent payment, going against the public interests and by hiding the fraudulence of the supplier and pre-shipment inspector.
WHAT HRC AGENT, BR DG SAY
Roni Mostafa, proprietor of Golam Mostafa and Sons, the local agency of HRC for the project, said the project authorities had sought clarification from Hyundai and that they would give it.
However, it may take some time due to the Covid-19 situation and New Year holidays, he told The Daily Star on December 29.
Asked about the alleged violation of contract agreement, he said, "This is a highly technical issue. I don't want to make any comment on it."
Talking to The Daily Star on Thursday, BR DG Shamsuzzaman said they were aware about the changes in the alternator model.
He said even after receiving the 65 percent payment, Hyundai would still get 20pc payment, which remains due.
The difference of costs between the two types of alternators would not be more than 5 percent of the total contract cost and that could be covered from the remaining 20pc payment. "So, why won't we clear the 65 percent payment?" he questioned.
About the allegations over violation of the contract, he said, "This is not any violation of agreement. Rather the changes were made for design adaptation. TA-12 alternator is heavier than TA-9, which is used to decrease the axle load of locomotives."
Project Director Nur Ahmed, however, said as per the agreement, there was no scope to change the alternators, because, in that case, other competitors of the bidding would be able to challenge the procurement and bidding process.
10 New Locomotives from S Korea: ‘Breach of contract’ under scanner
A South Korean company has supplied 10 locomotives to Bangladesh Railway allegedly violating some clauses of the contract, creating an impasse over the official handover of the train engines.
