Ministry eyeing overseas road shows for road projects

November 12, 2013

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Ministry is disappointed by dismal response of domestic companies to road projects opened up for bids this year

Ragini Verma

The road ministry has already extended the closing date for submission of the request for qualification document for three projects. Photo: Pradeep Gaur/Mint

New Delhi: Disappointed by the dismal response of domestic companies to road projects opened up for bids this year, the road ministry is considering taking its big-ticket projects to international markets.

Road secretary Vijay Chhibber has written a letter to R.P. Singh, chairman, National Highways Authority of India, to explore the option of conducting road shows abroad for major expressway projects such as the Eastern Peripheral Expressway and the Delhi-Meerut Expressway that are being monitored by a group set up by the Prime Minister.

“There is an overdependence on the domestic players who have either run out of equity or have defaulted on some infrastructure debt or the other and are struggling to get finance from banks,” said a senior road ministry official who did not want to be named.

“So we are looking to bring in international competition and market our bigger projects outside.”

The ministry of road transport and highways has already extended the closing date for submission of the request for qualification (RFQ) document for three projects—the two mentioned above and the Mumbai-Vadodra expressway.

These project have a total cost of around Rs.25,000 crore and are being monitored by a steering committee chaired by the principal secretary to the Prime Minister. The committee was set up by the prime minister in July to fast-track infrastructure projects with investments above Rs.1,000 crore.

The ministry extended the deadline in order to get regulatory approvals that are pending. “Domestic players understand that by the RFP (request for proposal) stage, the ministry might get the remaining clearances, but the international player would refer to a checklist. In order to market our projects better in the international market, we would like to get all the clearances.”

“So we will extend the closing of the RFQ date till all clearances are in place,” the official said.

While most clearances for the Eastern Peripheral Expressway have been secured, wildlife clearance for the Delhi-Meerut Expressway and land acquisition for the first phase of the Mumbai-Vadodra Expressway are pending, the official added.

Another senior road ministry official confirmed the development, saying: “We are exploring the option of conducting road shows in countries like Singapore, Hong Kong, Malaysia and Beijing (China). A recent visit abroad made us realize most other countries are not well aware of our projects.”

The move is likely to delay the deadline set by the steering group for these projects. But, the first official said, “It is preferable to get a better response for the project than meeting the deadline.”

The steering group had asked the ministry to award the Eastern Peripheral Expressway by 31 December 2013, the Mumbai-Vadodara Expressway by 1 March 2014, and the Delhi-Meerut Expressway by 15 March 2014.

The ministry failed to attract bids for 20 road projects worth Rs.27,000 crore, totalling 2,900km between March 2012 and October 2013.

“The Eastern Peripheral Expressway has been marketed several times; it has viability issues. Mumbai-Vadodra is a good project and perhaps one of the largest project that NHAI will ever bid, so it needs serious marketing,” said Parvesh Minocha, managing director of transportation business at infrastructure consultancy Feedback Infrastructure Services Pvt. Ltd

“The Delhi-Meerut project is a difficult project. In today’s environment, I am not sure which international company will bid for these projects. Clearances is not the biggest issue—the ministry needs to structure these projects better,” Minocha said.

Source-http://www.livemint.com