Govt sets a huge target
Finance Minister AMA Muhith has unveiled a plan to utilise an unprecedented amount of foreign aid next fiscal year with a view to successfully implementing the last full budget of his career.
In the next budget, the foreign aid utilisation target has been set at $7.6 billion (Tk 60,817 crore), which is 67.78 percent higher than the current fiscal year's goal.
The ambitious target comes as the government feels it has augmented its foreign aid utilisation efficiency sufficiently in the past several years and some individual countries have also made commitments to large projects.
Traditionally, Bangladesh has been getting large sums of assistance from the World Bank, the Asian Development Bank and Japan.
Now India, China and Russia have come forward with big amounts of assistance. Though their interest rate is low, they come with terms and conditions that will ultimately bump up the project costs.
More than half of the aid utilisation target fixed by Muhith for next year will come from individual countries.
If one-fifth of the aid in pipeline can be utilised it is assumed that the utilisation is at satisfactory level and in recent years the ministries and divisions have almost reached that level.
In fiscal 2008-09 the amount of aid utilisation was less than $2 billion, which crossed the $3-billion mark in fiscal 2013-14. And for the next three years more than $3 billion was expended.
Last fiscal year, $3.53 billion was used.
As of January, total foreign aid in the pipeline stood at $36.54 billion, according to planning ministry statistics.
Of the amount, Russia committed nearly $12 billion in Rooppur Nuclear power plant, meaning it would not be too difficult for the ministries to fulfil the ambitious target set for the next fiscal year.
Muhith yesterday told the parliament that one of the assumptions on which the budget was framed was that the disbursement of committed assistance would increase.
In the aid utilisation plan for next year, more than $2 billion has been earmarked for the transport sector, whose live projects include the Dhaka Mass Rapid Transit, Karnaphuli tunnel, Dohazari-Cox's Bazar-Gundhum rail line and the Padma Bridge rail line.
About $1.5 billion of foreign assistance will be utilised for construction of various power plants including the Matarbari ultra-supercritical coal-fired power plant.
Another project is the Rooppur nuclear power plant, where the government plans to use about $1 billion of foreign assistance. China has committed about $5 billion for the Padma Rail Link project and the Karnaphuli tunnel construction project.
The government has a target to open the Padma Bridge in 2018. Prime Minister Sheikh Hasina has also issued a directive to connect the rail link at Jazira point with the bridge as soon as it is opened.
Though loan agreement for Karnaphuli tunnel has already been signed with China no such deal has been inked for the Padma rail link.
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