B’desh to abandon 8 projects under Indian credit

Bangladesh earlier undertook 20 projects under the Indian credit for upgrading its infrastructure.

Dhaka: Bangladesh has planned to abandon
eight of the 21 projects to be implemented under the Indian
USD 1 billion credit line due to complexities arisen out of
lender`s "tough conditions", reports said on Tuesday.

An inter-ministerial meeting yesterday decided that the
eight projects might be dropped and replaced with "easily
executable" fresh ones, if agreed by the lender, media reports

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 percent 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 sands,
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

The official said the inter-ministerial meeting yesterday
discussed the problems as the executing ministries and
government agencies raised the issue of harder conditions
attached to the loan.

The Samakal newspaper 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 USD 1 billion loan for

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

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 USD 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