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Latest News
Local Firms Set To Pounce On India Highway Projects
News From : DagangHalal.com (12/23/2010)

KUALA LUMPUR: Malaysian construction companies are expected to be involved in the massive development of highways in India as early as the first half of next year under the recently inked memorandum of understanding (MoU) between the two governments.

Malaysia and India signed the MoU on Monday to promote technical assistance services in highway development and management in India.

Malaysian construction players are slated to participate in the development of 1,000km of highways in India that could potentially be worth RM17.5bil.

India's Road Transport and Highways Minister Kamal Nath told StarBiz that the first project under this initiative was expected to roll out in the next six months.

"Although currently Malaysian construction companies have been participating in India's infrastructure development, we want to take this to the next level where we want to enhance not only in terms of the numbers of players involved but also in the length of kilometres undertaken.

"The opportunities are not only restricted to the building of highways. There are also other areas such as landscaping, tolling technologies as well as management and maintenance of highways.

"India has a major infrastructure programme as we have a huge infrastructure deficit because our growth has preceded infrastructure development.

"At the moment we are not building for the future but we are catching up with the past," he said.

It is reported that India has embarked on a major road construction programme where 7,000km of roads are expected to be developed annually.

To date, Malaysian companies have been involved in 74 construction projects worth RM14bil in India, half of which were road infrastructure projects.

Kamal said Malaysia was the only country with which India had developed this kind of arrangement under the MoU.

"That demonstrates our relationship, where Malaysia has the strength and skills in the road sector coupled with its construction capacity that we need in India," he said.

On details of the MoU, Kamal said that identified projects would go through a price discovery mechanism which would have to be mutually agreed by both governments.

"In India, you cannot have one-size-fits-all for road construction costs; there will be a basket of price discovery mechanisms and we are working on this starting today.

"Then together with the Construction Industry Development Board, we will assign the projects to the respective companies," he said, adding that previously Malaysian companies had done direct bids but this was a new level of engagement.

To recap, India's Road Transport and Highways Ministry had in June last year started "towards 20km a day" programme for national highways. Towards this, 201 projects with a total length of 9,923km had been awarded between October 2009 and September this year.

With the award of these projects, the total work in progress currently stands at 14,704km where a further 10,665km will be awarded this year and next. Thus next year, according to the ministry, it would have work in progress in excess of 25,000km.

- The Star Online

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