Dhaka, Delhi to review projects tomorrow

Multi-billion Indian LoC

FHM Humayan Kabir | Published: October 16, 2018 10:27:36 | Updated: October 16, 2018 17:24:43

Bangladesh and India flags are seen cross-pinned symbolising friendship between the two nations. Photo/Collected

Bangladesh and India will sit tomorrow to review projects under the multi-billion dollar Indian line of credit (LoC) amid poor implementation, officials said.

The progress in the India-supported projects, especially under the second and third LoC, is still unsatisfactory, they said on Monday.

An Economic Relations Division (ERD) additional secretary and the Indian deputy high commissioner in Dhaka will lead the review meeting at ERD office here.

All the slow-moving projects are being funded from the $862-million Indian LoC-I, $2.0-billion LoC-II and $4.5-billion LoC-III in Bangladesh.

Some local implementing agencies claimed progress in many projects under the LoC-II and LoC-III is poor due mainly to complex procurement system from the single source, India.

"We'll sit together in Dhaka on Wednesday. We're hopeful of eliminating obstacles standing in the way to executing the projects," said a senior ERD official.

"We'll request the lending agency, Indian EXIM Bank, and the Indian project approval authority to settle the complexities discussing with Bangladesh's agencies concerned," he told the FE seeking anonymity.

The officials said Bangladesh has even failed to complete three development projects under the LoC-I, confirmed eight years ago in August 2010.

The government undertook 15 projects under the LoC-I after confirming the $862-million loan in August 2010.

Besides, the government agencies concerned have been able to sign only four commercial contracts with Indian suppliers for four projects under the $2.0-billion LoC-II, an ERD official said.

The rest of the 10 development projects are still in the initial stage of execution, he added.

Meanwhile, all the projects under the LoC-III have not got approval from the Indian side before starting their execution.

In October 2017, the government signed an agreement with the Indian bank to receive the LoC-III.

Implementers said non-cooperation from Indian contractors, delay in Development Project Proposal (DPP) approval by India and lone sources (only India) of procurement are the key obstacles to execution.

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 with a five-year grace period.


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