It is generally recognized that because of the stagnation in the Middle East markets, India must make concerted efforts to secure a larger share of the multilaterally funded projects. World Bank, African Development Bank and Asian Development Bank between them lend nearly US$ 20 billion per year for projects / programs in developing countries. Such projects enjoy high priority in the country of execution, and financing is fully tied up or is assured before the project is taken up for implementation. With the commitment of local resources, adequate support from the executing agency is also forthcoming. Reputation risks are minimized. Further, the funding agencies monitor the progress of implementation and enable corrective action to be taken if necessary to achieve project objectives.
India should be able to gain from its membership in these multilateral agencies through increased overseas business. However, our current share in this market is nominal:
Funding Agency Procurement from India’s share (%)
World Bank 492.50 0.65
Asian Development Bank 234.31 2.48
African Development Bank 9.19 0.29
Total 736.00 1.23
The contracts secured in the recent years have been quite diverse in nature, indicating the growing versatility and technological capabilities of Indian project exporters. The value of civil constructions and turnkey project contracts secured was Rs 1,362 crores in 1993-94, Rs 702 crores in 1994-95, Rs 1,024 crores in 1995-96 and Rs 1,199 crores in 1996-97.
Exim Bank attempts to promote effective participation by Indian companies in multilaterally funded projects by providing a range of information and advisory services viz.,
Advance information and advisory services: Thrust countries am thrust projects have been identified. Data on projects of interest of interest are assessed and disseminated to companies on an ongoing basis. The Bank carries an inventory of about 200 select projects at different stages in the project cycle.
Co-financing: Some projects aided by multilateral agencies have gaps in financing which can be bridged through commercial / export credit sources. Exim Bank selectively evinces interest in co-financing projects as a measure to promote Indian exports
Interactive process with companies: Interactive processes are set up with companies who are encouraged to register with the Bank. This helps to facilitate data dissemination and sets up feedback systems.
Support Services: Many of the exporters do not have balance sheets that compare favorably with their competitors abroad. This could lead to situation where capable contracts are not pre-qualified since they do not fulfill the financial criteria. Exim Bank can underpin financial worth of an Indian exporter.
Problems of project Exports: One problem which is faced by many Indian firms willing to participate in international tenders is the delay in securing tender documents. The time between the tender floatation and the last date for the submission of bids is about 2-3 months. The time lost in the transmission of the tender document necessarily results in reduction of time available for analyzing the tender documents and developing a proper bidding strategy. In his respect, Exim bank using its access to World Bank and other multilateral agencies, international data bases and its five offices abroad provides tips about potential projects to Indian Companies. It obtains advance information often 12-18 months before the project actually opens for tendering. However, it would be desirable for the companies very serious in project business to subscribe to Development Forum Business Edition to receive such news more expeditiously.
Another problem relates to the role of consultants. They play an important role in so far as drawing up the tender documents is concerned. In many cases tender documents may be drawn in such a way that favors a specific country. In view of the fact that not many Indian consultancy firms today are operating in the international market, sometimes Indian firms feel discriminated because of certain standards or clauses which might be incorporated in the tender documents, Indian consultancy firms must therefore be provided with all possible assistance to gain a foothold in the fiercely competitive market.