The Financial Express

Procurement troubles plague execution of Indian LoC projects

Dhaka, Delhi review progress

| Updated: July 14, 2018 13:41:35

Procurement troubles plague execution of Indian LoC projects

Bangladesh and India recently sat together to review eight slow-moving projects under the Line of Credit (LoC) characterised by procurement complexities, officials said on Friday.

Eight projects involving a substantial cost are struggling as those are facing different types of obstacles to execution, they said.

Deputy high commissioner of India in Bangladesh Dr Adarsh Swaika and additional secretary of the Economic Relations Division (ERD) Md Zahidul Haq co-chaired the review meeting in Dhaka.

The projects are being funded from the $ 862 million LoC-II, $ 2.0 billion LoC-II and $ 4.5 billion LoC-III in Bangladesh.

Officials who attended the review meeting said both the ERD and the Indian side expressed their dissatisfaction over the slow progress of the projects, some of which have been struggling for the last few years.

They have asked the implementing agencies concerned to complete the procurement at the soonest possible time.

Besides, they have asked Indian EXIM Bank, the lending agency, and Indian project approval authority, to remove the complexities through holding discussion with the Bangladesh's agencies concerned.

Officials at the implementing agencies identified non-cooperation from the Indian contractors, the delay in Development Project Proposal (DPP) approval by India and single sources (only Indian) of procurements as the key obstacles to the project execution.

According to the officials, the Indian $ 2.4 million modernisation and strengthening of BSTI (Bangladesh Standards and Testing Institution) project is in the worst shape.

The project is in limbo as there is a dispute between the Indian contractor and the BSTI on the supply of machinery.

The Indian contractor has supplied faulty equipment to the BSTI and has demanded payment for that shipment.

This has virtually derailed the efforts to strengthen the state-owned standardisation institution, said an official.

The $ 36 million-establishment of Jamalpur Medical College & Hospital project, $ 60 million-India-supported supply of machinery for solid waste management in Dhaka South City Corporation, and the establishment of 500-bed hospital and ancillary buildings in Jessore, Cox's Bazar, Pabna and Noakhali Medical Collage are also struggling for several reasons.

Besides, the installation of 0.10 million LED streetlight in Dhaka, Chittagong and Rajshahi city corporations, establishment of solar-based base station in hard-to-reach areas for strengthening Teletalk network project and the construction of "Tagore Centre" at Ramchandrapur in Mohammedpur, Dhaka" projects were also reviewed at the meeting.

The projects' combined costs are $ 25 million.

Bangladesh government took up 15 projects under the LoC-I after confirming the $ 862 million loan in August 2010 and some 14 schemes under the $ 2.0 billion LoC-II, confirmed in 2016.

The government signed an agreement with Indian EXIM Bank to receive $ 4.5 billion LoC-III in October last year.

The Indian credit bears an interest rate of 1.0 per cent with 0.5 per cent commitment fee to be repaid in 20 years.

The credit has a grace period of five years as well.


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