ADB ups India aid to $3 bn

The Asian Development Bank (ADB) today offered to double its assistance to India to $3 billion annually and expressed its keenness to invest in the infrastructure sector, including energy, urban development, rail freight corridor, roads and airways.

ADB President Haruhiko Kuroda, who is on a two-day visit to the country, today met Prime Minister Manmohan Singh, Finance Minister P Chidambaram, Planning Commission Deputy Chairman Montek Singh Ahluwalia and Roads Minister TR Baalu to discuss the progress of the bank-funded projects in the country and the future funding requirements in key areas like infrastructure.

"We are looking at increasing the aid to India from the current levels of $1.5 billion to $3 billion," Kuroda said after a meeting with Ahluwalia.

"We will need more resources for infrastructure development and ADB's offer is welcome. We did tell ADB that infrastructure is an important area for us and any assistance for its development is welcome," Ahluwalia said.

He added that "there are several routes through which the support can come. We have not talked about these and also the specifics regarding which project the ADB would fund and what would be the financing method".

At his meeting with the Minister for Shipping, Road Transport and Highways TR Baalu, the ADB president was asked to review the bank's project financing procedures in India and to support the viability gap in the phase three of the National Highway Development Programme (NHDP) to be widened via build-operate-and-transfer (BOT) route.

Baalu proposed relaxation of ADB's pre-qualification criteria of contractors based on the experience of the lead partner and leading to a tilt towards foreign companies.

Foreign companies did not actively participate in projects, leaving the majority of the work to be done by the less experienced joint venture partner, an official statement said today. The ministry has proposed that the experience of the minor partner also get adequate weightage in pre-qualifying contractors.

Baalu also stressed on the need for streamlining project approval procedures in ADB, and delegation of adequate authority to their resident office in India. The move was aimed at avoiding cumbersome procedure of frequent reference to the ADB headquarters for approval at various stages, the ministry release said.

It was also suggested that the ADB lending be programme based than project-based while providing for the viability gap in phase three of NHDP.