India to reject Chinese offer to finance and build its highways

The Indian government is expected to reject an offer by China to finance and build nine major highways, together worth nearly $1.5bn, because it wants to maintain an open bidding process.

A week after Chinese President Xi Jinping’s visit to India the Narendra Modi government is likely to reject China’s proposal to take on the construction of 890km of road – using its own companies – even though India is lagging behind in its ambitious road-building plans.

A government official told India’s Financial Express newspaper that the matter had been discussed in the transport ministry and that the ministry would tell its Chinese counterpart that the model suggested would "not be feasible".

The official said it was non-transparent and would make it difficult to judge the total project cost of a highway stretch. 

"We want the Chinese to participate in bids like other developers and take the projects. Both EPC and Build-Own-Transfer models are based on competitive bidding," the official added.

India’s road-building trade body also disapproved of the proposal. "It is practically impossible for the government to agree with such a proposal from China," M. Murali, director general, National Highway Builders Federation, told the newspaper. "Award of road projects in the country follow a process and everyone has to adhere to it."

India is having trouble achieving its ambitious road-building plans. 

In August the government was forced to go back to funding road construction itself after 21 projects advertised under the public-private partnership model (PPP) failed to get a single response from the country’s builders.

Photograph: Highway in Bangalore under construction in 2011 (Victorgrigas/Wikimedia Commons)

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