During the recent Chinese President's visit to India, China has expressed its keenness to take up construction of 890 kms of highways (nine stretches) worth Rs. 9,125cr that the government was planning to award on the EPC basis, said official sources claiming that Chinese road builders proposed that they would pick up these projects, finance them completely and also bring their own contractors for construction. In addition, they also want to take up the projects on a turnkey basis and insisted that they will bring Chinese labor, plant and machinery to construct the highway. However, India reportedly expressed its reservations to agree with such a proposal from China. Award of road projects in the country follows a process and everyone has to adhere to it, director-general, National Highway Builders' Federation, M Murali said.
He added that while rejecting the Chinese model for award of these (EPC) projects, the road transport and highways ministry has written to the Chinese government, seeking more details of their plans for PPP projects to be awarded through the BOT mode. In recent months, the award of new PPP projects in the highway sector has seen a big decline. China wants to invest in Indian infrastructure on an unprecedented scale, but would like to get the projects on a platter rather than through the competitive route.
Despite the hopes created about FDI inflows from China growing exponentially from the very low levels right now, the government has rejected China's proposal to build and fund a host of highway projects. The projects that Beijing asked for are in the engineering, construction and procurement (EPC) category, which are funded by the government through the National Highways Authority of India (NHAI) and where the role of the private sector is restricted to that of job contractors. The investment proposals by China under the model would not be feasible and the China government can participate in the tenders to be floated for PPP projects being awarded on the build–operate–transfer (BOT) mode.