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The much-awaited US$3.0 billion (Tk 247.49 billion) Chinese loan for the Padma Bridge railway link mega project is likely to be confirmed next month, as Bangladesh has removed the 'obstacle' to get the assured credit, officials said on Thursday.
To facilitate finalisation of the nearly $3.0 billion loan from Beijing, the government on an urgent basis approved a long-pending $231.5 million hard-term Chinese loan for telecom sector modernisation, they also said.
"Delay in offering the green signal to the Chinese assistance was affecting implementation of the Tk 349.88-billion Padma railway link project. So, the government endorsed the loan early this month on an urgent basis," said a senior official of the Ministry of Finance (MoF).
The Non-concessional Loan Committee, headed by Finance Minister A M A Muhith, approved the $231.5 million loan, to be utilised in modernising the telecommunication network of the state-owned Bangladesh Telecommunications Company Ltd (BTCL).
The official also said the government had been in trouble over the couple of years with its prioritised Padma Bridge railway link mega project, as China was going slow in confirming its assured $3.0 billion loan.
"There were some problems with the BTCL's telecommunication modernisation project. So, Bangladesh government delayed signing the deal regarding the $231.5 million loan with China. It subsequently made Beijing unhappy," said the official requesting anonymity.
The Padma Bridge railway link project financing from China is very essential at this moment. So, BTCL's borrowing from that country has been endorsed by the committee, the MoF official added.
According to the Ministry of Post and Telecommunications (MoPT), the Chinese telecom loan was ready for a long time. But the finalisation of the deal was getting delayed due to delay in approving the proposal of the Tk 18.61-billion project for modernising BTCL's network.
BTCL took up the project in 2014 to compete with mobile operators by modernising its services.
However, the project was affected due to high bidding price of the Chinese company concerned, which was higher than BTCL's official estimation.
"After much debate over the cost estimate for the last few years, MoPT negotiated with the Chinese company for bringing down the cost. After cutting some cost, the ministry sent the project to the Planning Commission last year for approval," he further said.
In October 2017, the long-pending project of BTCL got the nod of Executive Committee of the National Economic Council (ECNEC) with a condition that its cost would be slashed by about Tk 7.00 billion.
A MoPT official said the telecom modernisation project is scheduled to be completed by June 2020, resulting in low-cost and high-speed internet connectivity through land-phones.
At present, customers enjoy internet services through mobile phones and other means, as the existing BTCL network can offer only voice service with its video and data service quality falling short of modern standards.
He further said the Cabinet Committee on Economic Affairs awarded the project to a Chinese consortium of ZTE Holding Company Ltd and ZTE Corporation for implementation.
Meanwhile, the Bangladesh Railway has failed to start the work of Padma Bridge railway link connectivity project, as China has not confirmed its assured $3.0 billion loan for the mega project.
After getting assurance of the Chinese loan, the railway link project was approved by the government for beginning its construction work in January 2016.
The government made commitment to provide railway services through the Padma Bridge along with launching the bridge, whose construction is expected to be completed by 2019.