Highway projects get a push thanks to Malaysia

NEW DELHI: At a time when domestic private developers are hardly showing any interest to take up highway projects on public-private-partnership (PPP) mode, the Construction Industry Development Board (CIDB) of Malaysia has offered to bid for five such projects costing over Rs 9,000 crore.

Though China Railway Group Ltd (CREG) also looked keen to take up these projects, their proposal was turned down since conditions proposed by them were "non-transparent".

Confirming that government has accepted only CIDB's proposal, road transport secretary Vijay Chhibber said National Highways Authority of India (NHAI) will be responsible for initiating bids for two of these highway projects and for the rest his ministry will invite bids. CIDB is a statutory body under minister of works, Malaysia and it coordinates all activities in the construction industry.

The road transport ministry had provided a list of 10 highways projects to the Malaysian board after it had approached the ministry and showed interest to take up these projects. "It's a welcome sign since the government's outgo will reduce significantly if we get bidders on PPP mode. If we go for engineering, procurement and construction (EPC) mode we have to bear 100% of the cost," Chhibber added.

The projects for which NHAI will re-invite bids on build, operate and transfer (BOT-toll) mode are, Eastern Peripheral Expressway and Ambala-Kaithal stretch. The ministry will invite bids for three projects in Punjab.

Sources said that the Chinese group had proposed that it would get loan for construction of the original 10 projects and would get Chinese companies to construct them. "This proposal does not fit into our system and scheme of things. We can't do away with the transparent system of bidding where every company can bid for projects. So, as of now that chapter is closed," a senior transport ministry official said.

Revival of PPP mode in highway sector is crucial considering the fact that there is paucity of government funds to build and expand highways across the country. NHAI sources said that if the government continues taking up more projects on EPC mode (3500km every year), the authority will have to raise Rs 30,000-35,000 crore during the next financial year. The requirement would increase to around Rs 60,000 crore and almost Rs 80,000 crore in the following two years.

http://ift.tt/1vqEous projects,Eastern Peripheral Expressway,Construction Industry Development Board

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