PMO reviews projects under Indian $7.36b LoCs tomorrow

Dhaka,  Thu,  21 September 2017
Published : 17 Jun 2017, 00:19:51
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PMO reviews projects under Indian $7.36b LoCs tomorrow

Implementation delays prompt scrutiny
FHM Humayan Kabir


The Prime Minister's Office (PMO) will review the state of implementation of projects taken under three Indian Lines of Credit (LoCs) having an aggregate value of US$7.36 billion tomorrow (Sunday).

The projects are facing hurdles in their implementation, officials said Friday.

Economic Advisor to the Prime Minister Dr Mashiur Rahman will sit with representatives of the implementing agencies, other related government bodies and Economic Relations Division (ERD) at the PMO for reviewing the hurdles the Indian Line of Credit (LoC)-supported projects are facing, they said.

Officials said seven out of 15 projects under the $862 million Indian 1st LoC are still struggling with implementation delays although the loan was confirmed seven years ago in 2010.

Besides, progress of almost all the 14 projects under the $2.0 billion second LoC are also not visible despite the fact that the lender had confirmed the loan in March 2016, project insiders said.

Besides, the government agencies have taken up 17 other projects under the fresh $4.5 billion 3rd LoC, assured by the Indian government a few months back.

"Since some projects under the LoC-I are still struggling and all the 14 projects under the LoC-II are also lagging behind in implementation, the PMO has called the meeting to review those," said a senior Ministry of Finance (MoF) official.

Amid the slow progress of the previous two, the government agencies in addition have undertaken 17 other projects under the LoC-III whose implementation needs to be expedited, he added.

In the last couple of review meetings between India and Bangladesh, the lender expressed its disappointment over slow progress and different hurdles in project execution, the official told the FE requesting anonymity.

He said if Bangladesh could not show its progress in implementation of the projects under the LoC-I and LoC-II, confirmation and disbursement of the assured $4.5 billion loan of the LoC-III could be delayed.

An official of the ERD said they had planned to sit with New Delhi for finalising negotiations over the $4.5 billion LoC-III in the middle of this month.

"But the schedule has not been maintained. Against this backdrop, the PMO has asked agencies and related government offices for review of progress of the LoC-supported projects on Sunday," he added.

The ERD official said despite passage of seven years, Bangladesh Railway (BR) and Bangladesh Standards and Testing Institution (BSTI) are yet to complete their seven US$699.07 million projects under the LoC-I due to different complexities.

Besides, implementation of 12 projects out of 14 under the LoC-II is also going on at a slow pace, he added.

The interest rates for the LoCs have been fixed at 1.0 per cent annually with a 20-year repayment term, including a five-year moratorium.

India will charge 0.5 per cent commitment fee on the undisbursed amount after one year from the effective date of each of the loans.

kabirhumayan10@gmail.com
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