State-owned Chinese firm keen on Indian road projects

13 July 2016

Bidding for Indian highway projects in both engineering, procurement and construction mode and hybrid annuity model may witness participation from China Railway Construction Corporation Limited, as the state-owned Chinese enterprise has expressed its interest in bidding for projects to be offered by National Highways Authority of India (NHAI).

A high level delegation from the China Railway Construction Corporation Limited, led by its Chief Economist Zhao Jinuha met the Chairman, NHAI Raghav Chandra. 

The NHAI has projects lined up for upgrading of two-lane national highways totalling 50,000 km, various special expressway projects of around 15,000 km and a part of the National Highways Development Programme (NHDP) over the next few years, an official statement said.

The NHAI is also looking at various other connectivity projects in India for bypasses and ring roads around major cities contributing towards the smart cities projects, the statement said.

The Chinese delegates were keen on knowing about any restrictions on sources of procurement from abroad, import certifications requirements, whether the US dollar could be the currency of repayment (as annuity), availability of repayment guarantee and proof of capacity of NHAI to pay annuity and funding under the 'hybrid annuity model' (HAM). HAM is a mix between two models BOT annuity and EPC.

Under this, the the first 40 per cent payment will be made as a fixed amount in five equal annual installments and the remaining 60 per cent will be paid as a variable annuity after the completion of the project depending upon the value of assets created. There will be no toll right for the developer and revenue collection will be the responsibility of the NHAI.

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