25 dev projects lined up for foreign funding

The Economic Relations Division (ERD) under the Ministry of Finance is set to host a meeting of the "foreign assistance search committee" today to finalise foreign funding for 25 development projects proposed for inclusion in the Annual Development Programme (ADP) of the upcoming fiscal year.

The combined preliminary cost of the projects that will be discussed at the meeting with ERD secretary Shahriar Kader Siddiky in the chair, stands at around Tk 2.0 trillion.

"Of this, the government aims to secure approximately Tk 1.5 trillion in loans and grants from foreign sources," said an ERD senior official.

Among the projects on the agenda is the upgrade of the existing metre-gauge double railway line from Laksam to Chattogram via Chinki Astana to a dual-gauge double line.

The agenda also included two projects to procure watercraft for various agencies under the Ministry of Shipping, and another "Construction of Bhola Bridges on Barisal-Bhola Road over Kalabador and Tentulia River".

The meeting will also focus on securing financing for four projects aimed at generating a combined 430MW of electricity from solar and solar PV power plants.

Following the completion of the fourth phase of the Primary Education Development Programme (PEDP-4), the proposed fifth phase (PEDP-5) has been included for consideration.

Other notable projects on the list include the establishment of a second unit at the Eastern Refinery Limited (ERL) and the installation of a new gas pipeline from Bhola to Khulna.

ERD officials stated that such meetings are regularly organised to finalise the commitment of foreign assistance for various development projects.

The meeting will cover the estimated costs of the proposed projects, potential sources of foreign assistance, the progress of financing discussions with relevant development partners, and the various conditions set by the donor agencies, including loan interest rates.

The analysis found that the total cost of the three components of the Bangladesh Clean Air Project (BCAP) is estimated at Tk 29.04 billion, of which Tk 2.0 billion will be funded by the government, while the remaining Tk 27.04 billion will be provided by the World Bank (WB).

The government has already signed a $300-million loan deal with the WB for this purpose, according to sources from the Ministry of Environment, Forest and Climate Change.

The Ministry of Shipping is seeking a loan of Tk 14.48 billion for the "procurement of six new vessels, including chemical product oil tankers (40,000 DWT each) and three bulk carriers (50,000-55,000 DWT each), through a government-to-government (G2G) basis", with a proposed cost of Tk 18.43 billion.

Additionally, the ministry is requesting Tk 14 billion in assistance for the procurement of a 3,500 cubic metre trailing suction hopper dredger, two 28-inch cutter suction dredgers, ancillary vessels, and spare parts for Mongla Port.

The government of China has agreed to provide Tk 28.48 billion to support the implementation of these two projects, said a senior official of the shipping ministry.

Although the meter-gauge railway line from Laksam to Chattogram via Chinki Asthana was upgraded to a double line a few years ago, Bangladesh Railway is now planning to further upgrade the corridor to a dual-gauge double line, with an estimated cost of Tk 159.54 billion.

It is reported that discussions are ongoing for a loan of Tk 134.49 billion from the Asian Development Bank (ADB) to fund this project.

The Local Government Division (LGD) is seeking Tk 18.60 billion to implement the "Khulna Water Supply Project (Phase 2)," which is estimated at Tk 26.64 billion.

Additionally, the LGD is also searching for Tk 12.15 billion to implement the "Water as Leverage: Natural Drainage Solutions for Khulna City" project.

However, the ADB has agreed to provide loans of Tk 39.66 billion to support the implementation of these projects.

The Energy and Mineral Resources Division (EMRD) has proposed the modernisation and expansion of the Eastern Refinery Limited (ERL) to establish a second refinery, with an estimated cost of Tk 364.10 billion.

The meeting will focus on securing Tk 255.01 billion in funding from China, the JICA, the World Bank or other development partners.

Additionally, the EMRD has proposed the construction of the Bhola-Barishal-Khulna gas transmission pipeline project involving Tk 50.00 billion to utilise the gas reserves in Bhola area.

The government has decided to withdraw the project titled "Construction of Bhola Bridges on Barisal-Bhola Road over Kalabadar and Tentulia rivers" from the public-private partnership (PPP) list and implement it as an ADP project.

The Bridges Division is seeking funding for the majority of the project's preliminary estimate, which stands at Tk 129.16 billion.

"The economy of Bangladesh, particularly its development activities, is facing a significant downtrend due to the shrinking fiscal space of the government," said Dr Mustafa K. Mujeri, former director general of the Bangladesh Institute of Development Studies (BIDS).

He emphasised that efforts must be intensified to ensure a substantial inflow of foreign aid to sustain these development activities.

He also highlighted the importance of proper scrutiny of projects before approval and actively seeking financing to ensure the best value for government spending.

The economist further stressed that investment in human capital development, such as health, education, and social security, should take priority over the implementation of physical infrastructure projects.

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