Delhi meeting to review progress in LoC projects

FHM Humayan Kabir | Published: December 01, 2018 09:43:13 | Updated: December 02, 2018 09:50:58

Dhaka and Delhi are going to review again the progress in execution of projects under the Indian Lines of Credit (LoCs) this month in New Delhi, officials have said.

The officials on Friday said a Bangladesh delegation will go to New Delhi to participate in the LoC review meeting, scheduled for December 12.

An additional secretary of the Economic Relations Division (ERD) will lead the Bangladesh team at the meeting, which will review three ongoing LoCs totalling US$ 7.36 billion.

The Ministry of finance (MoF) officials said the progress of some projects, supported under the second and third LoC are not satisfactory yet.

Three projects under the US$ 862 million LoC-1 are still struggling for implementation delays while some from the $ 2.0 billion of LoC-2 and $ 4.5 billion of LoC-3 are also being delayed.

"The provisions for conditional procurement and slow process in project approval are the key obstacles to the implementation," said a senior official of MoF.

Besides, higher bidding prices by Indian contractors are affecting the smooth procurement and project implementation of the development work, he added.

Local project implementing agencies claimed that the progress in many projects under the LoC-II and LoC-III is slow due mainly to the complex procurement to be sourced only from India.

"We are expected to sit in New Delhi on December 12. We are hopeful about eliminating obstacles that stand in the way of executing projects," said a senior ERD official.

"We will request the Indian EXIM Bank and Indian project approval authority to resolve the complexities through discussion with the Bangladesh's project implementing agencies," he told the FE preferring anonymity.

According to the officials, project implementing agencies have so far failed to complete three development projects under the LoC-I, confirmed in August 2010.

Bangladesh took up 15 projects under the first LoC after confirming $ 862 million loan.

Besides, the implementing agencies have failed to sign commercial contracts for half of the proposed development projects under the second LoC due to procurement complexities, another official said.

Meanwhile, only two projects under the third LoC have get approval from the Indian side before their execution.

In October 2017, the government signed an agreement with Indian EXIM Bank to receive $ 4.5 billion under the third phase.

Implementing agencies said higher bidding prices, delay in endorsement of the Development Project Proposal (DPP) by Indian authority and lone source of procurement are the key obstacles to the project execution.

Bangladesh has to repay the Indian credit at an interest rate of 1.0 per cent with 0.5 per cent commitment fee in 20 years. The borrowing country will get five years of grace period for the loans.

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