India invites China to take part in road sector
India and China have agreed to work towards signing of a Memorandum of Understanding (MoU) in the areas of Road Transport and Highways. This was agreed during the meeting between Kamal Nath, Minister for Road Transport & Highways and Li Shenglin, Minister of Transport, China at Beijing. Under the MoU, both sides would seek to enhance cooperation in highway construction, exchange of technology and investments in the sector.
Nath said that India has embarked on a massive National Highway development programme under which it is proposed to construct 7000 km of National Highways every year over the next few years. “The quantum jump targets provided huge opportunities to the Chinese construction companies as also the Chinese financial institutions to enhance their engagement with India,” Nath said. He also informed that the preferred mode of highway development in India is Public Private Partnership. He said that 60% of the National Highways would be developed under the BoT (Toll) mode, while another 25% would be taken up on BoT (Annuity). “Already several Chinese companies are participating in the National Highway Development Project of India,” he added.
China has over the past decade made rapid progress in the infrastructure sector particularly Highway development. Li Shenglin informed that presently around 35,000 km of National Highways is under construction in China of which 10,000 km is likely to be completed this year.
The Minister met Lou Jiwei, Chairman, China Investment Corporation (CIC) and Dai Xianglong, Chairman of National Social Security Fund (NSSF) and sensitised them to the opportunities of investing in the National Highways sector of India and of the high returns that the sector promises to offer. Xianglong mooted the idea of the setting up of an India-China Highways Investment Forum for investors, developers and construction Companies which will provide a platform for the policy makers, financial experts and the business leaders to work closely towards enhancing project specific investment flows for mutual benefit. While CCI is a sovereign wealth fund that manages funds worth US$200 billion, NSSF have a total asset base of RMB 776 billion.
The Minister addressed a large gathering of investors and construction companies in Tianjin at the India Industry & Infrastructure Summit.