Chinese investment in Indian highways to rise 3-fold

NEW DELHI: The security concerns raised by the home ministry regarding investment of Chinese companies in select sectors have not come in the way of the Centre encouraging more investment from Chinese firms in the highway sector.

Projects of National Highway Authority of India ( NHAI), the prime implementing agency for highway construction in India, will see a three-fold increase in investment from Chinese companies in the next one year.

Nine Chinese companies, in joint ventures with Indian contractors, are already implementing six highway projects worth Rs 2,478.32 crore in India. Three highway projects worth Rs 1,264.24 crore have been completed. Minister of road transport and highways Kamal Nath said, “The investment of Chinese companies in Indian highway sector will increase three times.

We are all set to sign a memorandum of understanding (MoU) with China.”

Even though India is eyeing increased investment by Chinese companies, the contractors do not show a very good implementation record. All projects awarded to joint ventures with Chinese companies are running behind schedule. Of the six ongoing projects, four projects on Hyderabad-Bangalore highway were awarded in March 2007 and had a deadline of August last year.

They are running a year behind schedule and are likely to be completed by the end of this month or beginning of September. Two other projects — one six-laning project in Kerala and another four-laning of Ahmedabad-Godhra section — were awarded only in February this year and have a deadline of August 2012.

The three completed projects were also finished beyond deadline. The worst delay was in a Madhya Pradesh project which had a deadline of February 2008 but was completed eight months late in October that year. Another project in Rajasthan, awarded in October 2005, had a deadline of April 2008 but was finished only in December 2008.

A Gujarat project fared slightly better where the deadline was November 2007 but was completed six months late in May 2008.