India-funded $7.5b projects move at snail’s pace
Projects involving about $7.5 billion under the three Indian lines of credit are progressing slowly owing to lengthy processes in land acquisition, change in design and delays in hiring consultants and document preparation.
Despite various steps to expedite the utilisation of the funds, Bangladesh managed to use $523 million of the $862 million of the first LoC and $14 million out of $2 billion of the second LoC, according to a Bangladesh-India joint monitoring meeting in Dhaka that concluded yesterday.
No money has been used from the third LoC of $4.5 billion. The funds are ready for the projects but their implementation has been delayed for various reasons, said a finance ministry official.
The implementing ministries have included the projects in the LoC without doing sufficient homework, he said.
Now, they are sitting with their Indian counterparts every three months to work through the problems and implementation status is progressing gradually, the official said.
The two-day review meeting on the progress of the projects took place at the Economic Relations Division (ERD). Shahriar Kader Siddiky, joint secretary of the ERD, and Ajay Kumar, joint secretary to the external affairs ministry of India, led the respective sides.
Dhaka and Delhi signed the first LoC in August 2010 to implement 15 projects. Till April last year, $523 million has been used and 12 projects were implemented.
The majority of the 12 projects, involving $352 million, were related with procurement of buses, passenger coaches, wagons, locomotives and a dredger from India.
But the lion’s share of the credit has been set aside for three railway projects, which are facing delay. The projects have received $510.12 million, but only $149.02 million was used till April this year, officials said.
The finance ministry official attributed the delays, which is six years in this case, to the time taken to complete official procedures. The delay in appointment of consultants and the acquisition of land also stood in the way of implementation.
Of the rail projects, $123.74 million was spent out of the $308.92 million allocated for the construction of Khulna-Mongla Port Rail Line.
In case of the third and fourth dual gauge track between Dhaka and Tongi and the doubling of dual gauge track between Tongi and Joydevpur, $17.51 million against the total allocation of $123.1 million was used.
The third rail project involving $78 million for the rehabilitation of Kulaura-Shahbazpur dual gauge rail line has seen spending of $7.77 million.
SECOND AND THIRD LOCS
India approved the second LoC in March 2016 to implement 16 projects. About three years after the deal, 12 projects were approved by Bangladesh.
Two of the projects involve procurement of trucks and buses for Bangladesh Road Transport Corporation and equipment from India. Most of the vehicles already arrived in Dhaka, officials said.
The deal for the third LoC was struck in October 2017. Sixteen projects have been identified for implementation with the loan. The loan carries 1 percent interest and is payable in 25 years, including a five-year grace period.