Many large infra projects in India are now funded by Asian Development Bank (ADB), World Bank and Asian Infrastructure Investment Bank.
“In projects which receive international funding with the approval of the department of economic affairs (DEA), ministry of finance, the procurement of guidelines applicable to the project shall normally be followed, notwithstanding anything contained in this order and without reference to the competent authority. Exceptions to this shall be decided in consultation with DEA," a public procurement order notified on Thursday said.
Last week, India had restricted Chinese companies from participating in bids for government procurement without approval from relevant authorities on the ground of defence and national security. To be eligible to participate, Chinese companies now have to register with a “competent authority" to be notified by the Department for Promotion of Industry and Internal Trade and also get clearances from home and external affairs ministries.
Most multilateral agencies mandate international competitive bidding for all projects funded by them where the contract amount is at least $3 million. “International competitive bidding is the most appropriate method of procurement under ADB financing in most cases. This provides an executing agency with a wide choice in selecting the best bid from competing suppliers and contractors. It gives prospective bidders from eligible source countries equal opportunity to bid on goods and works that are being procured under ADB financing," ADB’s procurement policy says.
Chinese companies usually are very competitive in large transport projects, such as Metro, said an official of a multilateral agency working in India, under the condition of anonymity. For example, CRRC Dalian, an affiliated company under China’s top train manufacturer CRRC Corp., has delivered train coaches for the Nagpur Metro and Kolkata subway, while Shanghai Tunnel Engineering Co. (STEC) has won the contract for an underground stretch of the Delhi-Meerut Regional Rapid Transit System funded by ADB.
A host of Chinese companies, such as STEC, China Railway Tunnel Group Co. Ltd and Continental Engineering Corp., SJEC Corp., and China Harbour Engineering Co. Ltd have won contracts for ongoing infra projects in Mumbai city, including the Mumbai Metro.
“If Chinese companies are not allowed to participate in the competitive bidding process funded by multilateral lending agencies, it would violate the principle of equal treatment to all their member countries," the official added.
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