Malaysian companies fear that the return to power of India's opposition Congress party after eight years may hurt their bids for multi-billion ringgit infrastructure projects in that country, a report said today.

According to the Construction Industry Development Board, Malaysian companies are involved in the construction of more than 40 highways in India under contracts worth some RM20 billion, the Star said.

Several more billion-ringgit projects are being negotiated or have been tendered for by Malaysian firms, it said. Some 1,000 Malaysian engineers are also working in India on projects ranging from road building to water supply.

Analysts said there were concerns that India's economic reforms may slow after Sonia Gandhi-led Congress' upset win over the ruling Bharatiya Janata Party alliance and this could hit Malaysian contractors bidding for projects there.

They noted the different approaches to privatisation, with the more pro-business BJP calling for it to be accelerated during the election campaign while the Congress wanted it to be done more selectively.

"We don't know whether the new government will be friendly to foreign investors. If it isn't, it could put to waste all the hard work done," said an economist with a local brokerage.

Possible delays

Ranhill chief operating officer Kamarulzaman Omar told the daily that the Indian federal government would have the final say on major projects even if the state governments had approved them and this could cause delay.

Ranhill is leading a consortium in talks for five Indian projects, ranging from water supply to sewerage treatment and road and port development in Tamil Nadu, valued at more than RM4.5 billion, he said.

"Business risks will increase when there is a change in government," he said, adding that the company was closely monitoring developments before deciding on its strategy. - AFP