Bangladesh to abandon 8 projects under Indian credit

Wednesday, 18 January 2012 00:48 - - {{hitsCtrl.values.hits}}

Bangladesh has planned to abandon eight of the 21 projects to be implemented under the Indian $1-billion credit line due to complexities arisen out of lender’s “tough conditions”, reports said on Tuesday.

An inter-Ministerial meeting on Monday decided that the eight projects might be dropped and replaced with “easily executable” fresh ones, if agreed by the lender, media reports said.

The Samakal and several other newspapers reported that the decision came as the Ministries concerned reported that it became difficult for them to execute projects as the credit conditions required the recipient to procure 85 per cent of the goods and services from India, which were available in the country, in many cases, at a much cheaper cost.

“If the goods and services particularly like sand, bricks and workforces are to be procured from India, which are available in Bangladesh at a much cheaper price, the project cost will be very high,” a senior Finance Ministry official said.

The official said the inter-Ministerial meeting on Monday discussed the problems as the executing Ministries and government agencies raised the issue of harder conditions attached to the loan.

The Samakal quoting Economic Relations Division’s senior assistant secretary Zinat Rehana said Bangladesh would convey the plan to a visiting Indian delegation which was expected in Dhaka next week.

Bangladesh earlier undertook 20 projects under the Indian credit for upgrading its infrastructure after the Indian government in August 2010 confirmed a $1-billion loan for Bangladesh.

The Financial Express newspaper reported the largest recipients of the loan — the Railway and the Communications Ministries — so far failed to receive funds from the Indian credit line as they took up 17 projects under the credit, but they are yet to complete tender process for most of the schemes.

The report said Bangladesh Road Transport Corporation (BRTC) is the lone government agency, which was able to start spending some Indian credit to procure bus from India.

“Only one project has been running smoothly. The money for the rest 19 schemes under the $1 billion credit could not be utilised due to procurement complexities,” a joint secretary at the Finance Ministry told the newspaper.

According to the loan deal, Bangladesh will have to procure 85 per cent of the goods, works and services from India for the schemes and the rest 15 per cent can be procured from Bangladesh if the contractor fails to source it from India. (The Hindu)