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India urges Bangladesh for transparency in US$1b Credit

Publication Date : 11-10-2012


New Delhi yesterday urged Dhaka to ensure the highest level of transparency and fairness in utilising its US$1 billion Line of Credit (LoC) for procurement of buses and railway wagons, and infrastructure development projects.

“Our Right to Information Act is very strong, so Bangladesh must strictly follow the Line of Credit guidelines and procurement procedures as well as maintain maximum level of transparency and fairness in approving the projects and utilisation of money,” said an Indian government official.

New Delhi has also called for expeditious implementation of the projects undertaken, particularly for communication infrastructure, apparently to facilitate transit process with Bangladesh.

Bangladesh and India yesterday agreed to expedite the implementation of the projects by maintaining transparency at the Third Review Meeting of the $1 billion LoC held at the Economic Relations Division (ERD).

Although India extended the credit to Bangladesh in August 2010, the implementation of the projects was delayed due to frequent changes of guidelines and various other complexities.

Joint Secretary of Development Partnership Administration of the Ministry of External Affairs Radhika Lokesh led the Indian delegation while ERD Joint Secretary Ashifuzzaman led the Bangladesh side.

The credit component of the $1 billion credit line has been reduced to $800 million following the conversion of $200 million into grant.

According to the officials, 12 projects aggregating to $655.10 million had so far been included under the line of credit.

The Bangladesh side regretted the delay by India in providing a guideline on utilisation of $200 million grant. Officials said the government of India had announced the amount as grant about five months ago, but had not yet furnished the guideline that was causing the delay in taking up the projects.

The Indian side admitted the delay saying that some of the infrastructure projects were highly technical and complicated and hence required maintaining strict verification to avoid procedural flaws.

Officials said the government had so far taken up 15 projects, of which 12 had been finalised. Of the 12 projects, seven had already been awarded contract while the remaining were in advanced stage for bidding process.

The projects awarded contract include procurement of 300 double-decker, 100 single-decker and 50 articulated buses, procurement of 180 broad gauge oil tank wagon and six brake vans, construction of second Bhairab and second Titas bridges with approach rail lines and Khulna-Mongla rail line, and procurement of railway locomotives, tank wagon etc.

Of the rest eight projects, seven are under tendering process while tender for one is yet to be floated.

Meeting sources said the review meeting discussed all the matters relating to speedy implementation of the LoC in keeping with mutually agreed guidelines for administering the credit line.

“We reviewed the present status of all the projects and found that the undertaken projects are being advanced very smoothly, and the remaining projects would be started urgently,” said ERD Joint Secretary Asifuzzaman.

On a question about $200 million grant, Asifuzzaman said the Indian side would provide the guideline very soon and the Bangladesh government would be given priority to select projects under this grant money. Besides, there would be no such condition as imposed on other projects under LoC, he added.

He said the project regarding upgrading of the Bangladesh Standards and Testing Institution at a cost of $2.3 million had been finalised.

On relaxation of credit conditions, he said the Indian government had already reduced the interest rate from 1.75 per cent to 1 per cent. It also relaxed the condition of 85 per cent Indian content up to 30 per cent on various projects.


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