Review meeting on Indian LoC projects next week

Dhaka,  Sat,  23 September 2017
Published : 25 Nov 2016, 23:53:54

Review meeting on Indian LoC projects next week

FHM Humayan Kabir

Dhaka and Delhi will review next week the progress on the projects being implemented under the two Indian lines of credit (LoCs) worth about $3.0 billion, officials said.

A Bangladesh delegation, headed by Economic Relations Division (ERD) Additional Secretary Abul Mansur Md. Faizullah, will visit India on November 29-Dec 02 for attending the review meeting in New Delhi.

The stocktaking will be held on the projects under the first Indian LoC worth $1.0 billion and the modalities of implementation of the $2.0 billion second tranche of LoC in Bangladesh.

"The meeting will mainly deal with progress on the second $2.0 billion LoC- supported projects as some projects are still awaiting approval from the Indian side. The delay in endorsement from India will ultimately affect their execution," said a Ministry of Finance (MoF) official.

India offered the second LoC during the Narendra Modi's visit to Bangladesh in June, 2015. The first LoC was confirmed in August, 2010.

Earlier, Bangladesh had sent a list of 14 projects to New Delhi inclusion in the $2.0 billion fresh LoC, the officials said Friday.

An ERD official said India recently approved five projects for incorporating into the second LoC.  Earlier in June, the neighbouring country had also endorsed four other projects with a support of $430 million. Now, five more projects await inclusion in the $2.0 billion LoC framework.

On March 9 this year, the government signed an agreement with India's EXIM Bank to receive $2.0 billion under the LoC for funding 14 development projects in the country's various sectors.

Earlier, the government took up 15 projects under the first LoC after confirmation in August 2010. India later converted $200 million out of the $1.0 billion LoC to grants in June 2012. And the credit was enhanced from $800 million to $ 862 million in 2015 through an agreement.

The MoF official Friday said they would request New Delhi to expedite the inclusion process and loan disbursement for the proposed projects under the $2.0 billion LoC.

"We hope the review meeting will remove all the complexities on way to executing the proposed 14 projects," he added.

Under the $862 million LoC financing, only a few out of total 15 projects have been implemented while most are in different stages of implementation.

The proposed 14 projects under the 2nd $2.0 billion LoC include procurement of trucks for Bangladesh Road Transport Corporation, procurement of double-decker and single-decker AC and non-AC buses for the BRTC, upgrading Ashuganj river port-Sarail-Dharkhar-Akhaura land-port road to four-lane national highway, setting up double railway tracks along Khulna-Darshana line, converting the Parbatipur-Kaunia meter-gauge line to a dual-gauge track, upgrading Syedpur railway workshop, the installation of Barapukuria-Bogra-Kaliakoir 400-kilovolt power-transmission line, procurement of modern equipment to upgrade the Roads and Highways Department, setting up four medical colleges and hospitals, national burn and plastic surgery institute, and construction of 49 polytechnic and teacher-training institutes. The fresh Indian credits bear 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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