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China bids to build part of India’s freight corridor project

November 21, 2011

At a time when India-China border disputes are being ironed out and bilateral trade is projected to touch US$100 billion by 2013 – two years before expectations, China’s investments in India are rising.

According to news reports, a Chinese state-run firm – China Railway First Group and other international construction giants from 8 countries are vying for a 6,000-crore tender for the eastern part of the dedicated freight corridor project, signaling a growing interest of foreign companies in India’s infrastructure sector. The project, part of the ambitious high-speed freight corridors linking Delhi with Mumbai and Kolkata, has also attracted companies from France, Russia, Italy and Ukraine. The Dedicated Freight Corridor Corp of India Ltd (DFCCIL), a company promoted by the Indian Railways, has received 16 applications for the pre-qualification bids, according to the Economic Times.

China Railway First Group Co., Ltd. (formerly named The First Engineering Bureau of Ministry of Railways) is a large comprehensive construction enterprise, mainly engaged in the construction of new railway. Since the founding of the Bureau over 50 years, it has built tens of long and trunk railways over 9500km long, including the last leg of the Qinghai Tibet Railway from Lanzhou to Lhasa, which is the most treacherous part.

Some of India’s biggest infrastructure companies – L&T, Punj Lloyd, Gammon, HCC – are also vying for this contract, which entails them to execute civil and track works. “We will invite financial bids by January and work on this stretch should commence by April next year,” a senior official of DFCCIL told the Economic Times.

“The international players are showing increased interest in India’s infrastructure sector as also evident in national highways project. The increasing number of large international companies indicates growing maturity and size of the Indian infrastructure market,” said Abhaya Agarwal, Executive Director and Leader PPP at Ernst and Young.

In June, the World Bank had approved a loan of 4,500 crore for the 350-km stretch of the project. While Indian Railways will develop a part of the remaining section, DFCCIL is mulling to develop 550 km through a public-private partnership mode. The 1,800-km Eastern Corridor is expected to ease movement of coal and other important commodities from the northern to the eastern part of the country. World Bank financing will cover a route length of 1,130 km and will be provided in three phases.

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