India-funded projects going on at snail’s pace

FT ONLINE

The implementation of the projects funded by the Indian line of credit (LoC) is going on at a snail's pace.

Even the slow progress is reported to have irked Prime Minister Sheikh Hasina.

A document on the progress of the LoC projects shows that until last month, half of the first LoC remained undisbursed.

The status of the progress of the projects of the second and third LoC is also poor.

Last week, a meeting was held on the status of the Indian LoC projects with Prime Minister's economic affairs adviser Dr Moshiur Rahman in the chair.

Representatives from the Indian High Commission were also present there.

Dr Rahman told the meeting Sheikh Hasina is deeply concerned about the slow progress of the projects.

The meeting urged all relevant ministries to expedite the entire process, said people who attended the meeting.

According to ERD documents, the $862 million first LoC was signed in 2010 during the then Indian prime minister Manomohan Singh's Dhaka visit.

But up to May, only $389 million was disbursed.

In the current fiscal year the disbursement was only $38.35 million, according to the document prepared by the Economic Relations Division (ERD).

Out of the 15 projects, 12 have been completed in the last eight years, and three are ongoing.

The second LoC worth $2.1 billion was signed in March 2016.

Of the 16 projects included in the second LoC, 14 were approved by both governments.

But the DPPs (Development Project Proposal) of two projects undertaken by the state-run Bangladesh Economic Zones Authority (BEZA) have not been prepared yet.

And the DPP of one project of the power ministry was sent to the Planning Commission a few years ago.

When contacted, additional secretary of ERD Zahidul Haque said the progress of the first LoC was slow.

But the authorities trying to expedite the entire process, he added.

He said the line ministries have the main role in this process but in many cases, they failed to complete the documentation work in due course of time.

This delayed the approval, he added.

Initially, the total cost for the second LoC projects was $2,069 million.

But later it was raised to $2,195 million due to the rise in the cost of three railway projects.

The projects for which preparations for calling tenders are underway include the $357 million project to upgrade the Ashuganj river port to Akhaura land port road to four-lane and $193 million dollar project to establish Information technology (IT) parks in 12 districts.

The railway is also preparing tender documents for the $357.77 million Khulna-Darshana double line construction project.

On the other hand, the DPPs for the projects for establishing Indian economic zones in Mongla and Bheramara worth $88 million have not been submitted to the Planning Commission as yet.

The $51.30 million project for the construction of Ashuganj Inland container terminal has also not been approved by the Executive Committee for the Economic Council yet.

Meanwhile, the cost of the third LoC was raised to $4,618 million from the initial $4,500 million.

So far draft DPPs for three projects have been sent to the Indian High Commission for approval.

The interest rate for the LoC is lower at 1.0 per cent.

But Bangladesh needs to purchase 65 to 75 per cent of the services or goods from the Indian market with the money to be provided under the LoCs.

India offered Bangladesh the third LoC through signing a Memorandum of Understanding (MoU) in April in New Delhi in Hasina's presence.

Officials said several government agencies have already undertaken 17 development projects to be implemented with the upcoming $4.5 billion loan.