Malaysian companies bet big on India highway projects under BOT model

By: | Published: October 14, 2015 12:42 AM

Malaysian firms have experience of working in 56 countries

Bidding for highway projects being developed on the build, operate and transfer (BOT) model is expected to hot up soon with Malaysian companies throwing their hats in.

Malaysian firms having experience of working in 56 countries have been eyeing to get a pie of Indian roads for quite sometime now. The road minister of the south-east Asian country is coming to India on Wednesday along with a host of potential concessionaires to hold parleys with his Indian counterpart and other senior road ministry officials.

“Malaysian investors are interested in BOT toll projects, not in EPC (engineering-procurement-construction) projects. When we told them that we do not have many BOT toll projects on offer, they said they would also look at investing through the hybrid annuity model, another form of public private partnership projects, road secretary Vijay Chhibber told FE. The Malaysian government, he said, is encouraging its construction companies to invest in the highway construction in India.

Chhibber said the government would like them to participate in the bidding process so as to ensure creation of competitive environment for the country’s road sector. “Malaysian roads are very good. So, in a sense, you are getting world class concessionnaires,” he said.

Malaysia’s state-run Construction Industry Development Board had earlier evinced interest in Indian highway projects but no major headway was made by them as PPP sector lost sheen in the final years of the UPA-II government. Earlier this year also, the Malaysian government and companies had a meeting with the road transport and highways minister Nitin Gadkari in New Delhi. The Indian side had apprised them of the plans for the country’s highway sector and steps taken in recent times to improve the ease of doing business.

As reported by FE earlier, the award of PPP projects, stuck for long, has gathered some momentum recently, with a newly-designed hybrid model under which 40% of the project cost to be borne by the government, attracting investors. The road ministry is planning to award road projects worth R3.5 lakh crore in the next six months.

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