LoC projects progress may be reviewed during Modi’s visit

Hasibul Aman

22nd March, 2021 11:07:03 PM printer

LoC projects progress may be reviewed during Modi’s visit

Progress of Indian LoC projects may be reviewed during the upcoming visit of Indian Prime Minister Narendra Modi to Bangladesh marking its 50 years of independence.

As part of it, Economic Relations Division (ERD) is taking necessary preparations to make a summary of the review ready, ERD sources said.

A copy of the summary of the potential meeting has already been sent to Finance Minister AHM Mustafa Kamal, revealing the LoC projects’ latest status, their problems and other aspects, sources added.

Narendra Modi is scheduled to visit Bangladesh on March 26-27 to attend the country’s 50 years of independence celebration function.  He will lead a large Indian delegation.

Some ERD officials said Indian LoC projects may be discussed during the bilateral meetings between the officials of the two countries.

Even though ERD has not received any formal letter in this regard, it is taking necessary preparation to update LoC projects information and the discussion.

However, projects being implemented under Indian line of credit are yet to get momentum at the expected level. 

In the last 10 years, Bangladesh has received commitments for a total of $7.5 billion or nearly Tk 600 billion loans in three separate LoCs. Of the amount, India has declared $200 million grants.

But only $729 million or approximately Tk 61.95 billion has so far been disbursed from the total credit lines, ERD figures suggest.

“We’re not still sure that any review meeting on LoC projects will take place during Narendra Modi’s visit. If there is any, we’re ready to supply necessary information as we’ve recently held a review on the India funded projects,” said an ERD high-official, seeking not to be named.   

ERD joint secretary and also its Asia Wing chief Md Shahriar Kader Siddiky, however, is not convinced that Indian LoC projects are moving very slowly.

“The information is not true that LoC projects are slow. Many projects have not yet been prepared. Then how the projects will see progress when their DPP are not ready?” he remarked.

Development Project Proforma (DPP) is being ready for most projects under third LoC. “You’ll see the progress after the projects are approved,” Siddiky noted.

Out of total 46 LoC projects, 14 projects have so far been completed, while eight are going on and others are either at procurement tendering stage or DPP preparation or revision stage, according to ERD.

Getting approval from the Indian government for preliminary project approval, approving consultant appointment as well as tender documents takes much time, which is a major cause of project delay.

At the implementation stage, Indian contractors are found to be very slow and repeated reminder by the ministries of Bangladesh yield little results, some ERD officials dealing with the LoC said.

Moreover, project directors do not have the financial power which is exercised by Indian Exim Bank, the project financier. The Indian Exim Bank is also blamed for slow fund disbursement, resulting in project delay.

First LoC’s size was $1 billion, which later stood at $862 million with turning $20m of that money grant and inclusion of $62 million more credit to it.

Of the money, nearly $629 million was disbursed until early February this year, ERD data suggests.

Out of $2 billion second line of credit, over $94 million has so far been disbursed while nearly $6.4 million has been released out of $4.5 billion third LoC.