India plans to develop roads in neighboring countries as it seeks to strengthen its position in South Asia amid the growing influence of China. State-owned National Highways Authority of India plans to build roads abroad even as it falls short of construction targets at home and seeks to raise funds overseas to finance local projects.
“There are lots of offers for us,” India’s Transport Minister Nitin Gadkari said in an interview in New Delhi on Wednesday. The road-building authority, or NHAI, will bid for projects in nations that are part of the South Asian Association for Regional Cooperation and has begun talks with the Sri Lankan government, he added.
Prime Minister Narendra Modi is visiting the island nation on May 11 and 12, at a time when India is intensifying efforts to push back rival China which has been investing in projects in Sri Lanka, Bangladesh and Pakistan. This includes a $50 billion spend in countries that are part of President Xi Jinping’s Belt and Road development initiative, according to a report by the official Xinhua News Agency.
India is funding a $350 million development of an 84-tank oil storage facility and has plans to set up a refinery in Sri Lanka. It has also signed agreements worth $9.24 billion with Bangladesh to fund power plants and supply liquefied natural gas.
NHAI is at the center of India’s infrastructure ambitions as Modi’s government races to meet its $387-billion target to build roads and ports to improve connectivity in the world’s fastest-growing major economy before national elections in 2019. It however fell short of the government’s highways construction target of 42 kilometers a day, developing an average 23 kilometers of roads every day.
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Delays in acquiring land and environment clearances, poorly performing contractors and public protests slowed construction of highways, junior road minister P. Radhakrishnan told the nation’s Parliament in March. The government is betting that cheaper overseas funds will help it meet its road development target.
“Land acquisition costs have increased. So our mission is to see how we can reduce the cost of construction,” Gadkari said. “We’re trying our level best to see how we can make roads more economically viable,” he added.
NHAI’s first Masala bond offer worth 50 billion rupees ($774 million) is expected to list on the London Stock Exchange shortly and the government expects “competitive and attractive” rates for its bonds from insurers, pension funds and Korean and Japanese bankers, Gadkari said.