Govt plans to use $7.55b foreign aid next year
The government is gunning for record foreign aid utilisation next fiscal year with the view to wooing the electorate ahead of the national election scheduled for 2019.
Bangladesh could never utilise more than $4 billion of foreign aid in a year, but the government plans to utilise about $7.55 billion of foreign aid in fiscal 2017-18.
The disclosure comes after Finance Minister AMA Muhith last week said the budget for fiscal 2017-18 -- the last full fiscal year before the elections -- will be an exceptional one.
The government wants to accelerate the progress of a number of transformational projects such that they can take some shape when the Awami League gets into campaigning mode, said planning ministry officials.
Meanwhile, Prime Minister Sheikh Hasina yesterday approved Tk 153,331 crore as the outlay for next fiscal year's Annual Development Programme, which is 39 percent higher than the current year's allocation.
The government's own fund contribution has been raised 23.98 percent to Tk 96,331 crore and foreign fund 73.32 percent to Tk 57,000 crore.
The state-owned enterprises will get Tk 10,753 crore, where the amount of foreign aid is more than Tk 3,000 crore. At present, more than $32 billion of foreign aid is sitting idle in the pipeline.
Multilateral and bi-lateral development partners including Japan, India, China and Russia have committed to financing a number of mega projects against which a big amount is expected to be released in the upcoming fiscal year, said a planning ministry official.
“The government wants to make the implementation status of the projects visible before the next parliamentary elections. Whatever the historical trend is, the government thinks disbursement will accelerate next fiscal year,” he added.
Russia will provide about $12 billion for the Rooppur nuclear power plant project, more than $1 billion or Tk 8,275 crore of which is expected to be used next fiscal year.
The power sector will get Tk 21,309 crore next fiscal year, Tk 11,903 crore, or $1.49 billion, of which will be project aid.
The target next fiscal year is to get the public sector power plant into production and also improve the supply lines, the planning ministry official said.
The government has been considering not setting up more rental power plant because of their high-cost.
It is also hoping that the Matarbari coal-based power plant that is being implemented with Japanese assistance will take some form next year.
Some $250 million, or Tk 2,000 crore, of foreign aid allocation has been made available for the Matarbari coal-based power plant.
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.
The finance ministry has already written letters to China to approve the foreign assistance by this year.
Total allocation for Padma Rail Link project in the next budget is Tk 7,609 crore. Of the sum, Tk 4,949 crore, or $618 million, will come from Chinese assistance.
From Chinese assistance, foreign aid of Tk 1,008 crore, or $126 million, has been allocated for the Karnaphuli tunnel.
About Tk 3,425 crore will be allocated for the metro rail project in next year's budget, of which Tk 2,700 is foreign aid.
The work on metro rail slowed down due to militant attack in Gulshan last year, which killed 7 Japanese nationals working on the project. But thanks to various steps taken by the government Japan has resumed work.
A big amount of disbursement from India's $3 billion line of credit may be made in the upcoming fiscal year, according to planning ministry officials.
Besides, the World Bank and the Asian Development Bank have committed to increasing their assistance to Bangladesh, a finance ministry official said.
Next fiscal year, the transport sector will get the highest allocation of 26.77 percent of the total ADP, followed by power 12.30 percent, education 10.87 percent, science, information and communication technology 9.42 percent, rural development institutions 8.58 percent, health 6.65 percent and agriculture 3.92 percent.