The Financial Express

Dhaka to seek $3.0b Chinese aid

Joint working group meets Monday in city

| Updated: December 10, 2019 19:47:48

Dhaka to seek $3.0b Chinese aid

Bangladesh will seek US$3.0 billion in aid from China for the next three years in the upcoming joint working group meeting to be held on Monday, officials said.

It will also seek relaxation of terms and condition for the aid and confirmation of funding to 27 projects, pending Chinese money during the last five years, they said.

The joint group is going to sit in Dhaka for the first time, to discuss different bilateral economic and trade issues.

The group was formed after a deal signed during Prime Minister Sheikh Hasina's visit to Beijing in July this year.

The group aims to facilitate economic and trade cooperation while resolving the issues that stand in the way of enhanced collaboration.

"This will be the first meeting of the group. We will seek extended assistance and relaxation of their terms and conditions," said an official.

A 32-member Chinese delegation, headed by a deputy director general of the ministry of commerce of China will take part in the meeting in Dhaka.

Bangladesh delegation will be led by an Economic Relations Division, or ERD, joint secretary.

China has pledged to provide $2.0 billion for the three-year period, which ends by the end of this fiscal, the official said.

"But Bangladesh needs more investments. So we will request China to increase its financial support to at least $3.0 billion over the next three years," the official told the FE.

The group is crucial to both Bangladesh and China as it is tasked with resolving the issues that constrain the depending of trade and economic cooperation between the two countries.

The Chinese delegation is likely to raise some demands, including the interest rate hike, extended facilities for the Chinese investors and contractors and special security to the Chinese contractors and professionals.

Officials said China may also urge Bangladesh to speed up its project approval process as it is unhappy with their start-up and land acquisition complexities for different ongoing and proposed projects.

Of 27 projects, the Bangladesh side has indentified 11 priority ones involving $5.40 billion as these have experienced implementation delays over the last four years.

Among these, some $1.27 billion funds will be required for converting metre-gauge railway track to dual-gauge from Akhaura to Sylhet, $1.04 billion funds for the construction of double railway lines between Joydebpur and Ishwardi, $970.02 million funds for the Power Grid Company of Bangladesh's (PGCB) network expansion and strengthening project, and $837 million funds for digital connectivity project.

Besides, the country will get updates on China's position regarding $276.25 million fund for the Rajshahi Water Supply and Sewerage Authority's surface water treatment plant project, $125 million funding for setting up six TV stations of the Bangladesh Television, $353.5 million for the modernisation of the Mongla Port facility, $280 million for BMRE (balancing, modernisation, rehabilitation and expansion) of the state-owned jute-mills, and $221 million for Chinese economic and industrial zones in Chittagong project.

In 2015, the Bangladesh sought financial support worth $20 billion from China to get 27 development projects financed.

But another official said China has so far confirmed loans for five projects only. The rest of the projects are still struggling due to fund shortage, he noted.

The official said the implementation of most of the projects had been delayed due to the absence of funding assurance.

Bangladesh has so far signed contracts of US$1.48 billion for loans under the current aid package.

In the government team, some project directors will also be included so that they can give the latest status of the implementation, he added.

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