Domestic infrastructure companies make a u-turn, show interest in road projects

NEW DELHI: Investors have taken renewed interest in India’s road sector, with domestic infrastructure companies, which had earlier shunned bids put up by the Narendra Modi-led government, having expressed interest in them after Malaysian and Chinese firms wanted to pick up five public-private partnership projects worth Rs 10,000 crore. “We have seen renewed interest in some projects that had been up for bidding earlier but had not found any takers. This is especially so after foreign investors showed keenness to take them up,” a senior government official told ET.

The government’s attempt to win over investors, who had become averse to the road sector after it faced cost over-runs due to delays in land acquisition and other clearances, had met with a cold response with many projects failing to elicit even a single bid.

Close to 189 highway projects involving investments of aroundRs 1,80,000 crore had got stuck due to land acquisition hurdles, delays in forest and environment clearances. As many as eight projects put up for bidding by the new government failed to evoke any interest, while some four others received unviable ones. The total cost of these projects is over Rs 20,000 crore. This prompted the government to tap foreign investors from China and Malaysia who had evinced interest in picking up projects in India.

A set of investors from China and Malaysia is keen to pick up projects in the Build-own-Transfer (BOT) mode. The official, however, declined to name them. The highways ministry plans to invite fresh bids for these projects on BOT basis next week. “It is a welcome sign.

Some of these companies even get subsidies if they invest abroad. One now needs to see the viability of these projects to ensure that more companies participate in the bids,” said Parvesh Minocha, managing director, Feedback Ventures. Road transport and highways minister Nitin Gadkari had announced rollout of road projects worth Rs 2 lakh crore in the current year itself. Gadkari had also said that government will fast track decision making and weed out corruption and red-tapism from government functioning for speedier execution of projects.