Three projects under the first Indian Line of Credit (LoC) have not been completed even a decade after the government signed an agreement with the Indian Exim Bank in this regard.
Concerned stakeholders have identified delays in loan approval procedure by the Indian authorities and negligence on part of the Indian contractor agency as the key reasons behind the slow progress of these projects.
So far, the Indian authorities have disbursed $604.9 million under the first LoC, which is slightly over 70 percent of the total loan amount of $862 million.
Like the first LoC, loan disbursement under the second LoC is also going slow. According to the latest data provided by the Economic Relations Division, India has so far disbursed only 4.2 percent of the $2 billion worth of the second LoC. Furthermore, no project has gone into the implementation phase under the $4.5 billion third LoC signed three and a half years ago.
Amid such a situation, Bangladesh and India are going hold the 17th LoC review meeting on August 19-20 next. For the first time, this review meeting will be held online because of the current Covid-19 situation.
In the meeting, Shridhram Madhusudanan, joint secretary of the Ministry of External Affairs, India, will lead the team of representatives from his country, while Md Shahriar Kader Siddiky, joint secretary of the ERD will lead the Bangladesh team.
According to people concerned, the two countries hold two LoC review meetings every year to discuss problems related to the approval process and implementation of the LoC projects. However, the problems still remain the same as they were before.
All the eight projects completed within three years after the signing of the first LoC were related with procurement of buses, passenger coaches and locomotives from India.
As per the conditions set in the LoC agreement, the products are supplied by India, because of which the Indian authorities approved those projects in quick time in their own interest.
However, the projects undertaken to develop infrastructure in Bangladesh have been facing delays in loan disbursement due to sluggishness in the approval process by the Indian authorities and negligence on part of the Indian contractor agencies.
Ahsan H Mansur, executive director of the Policy Research Institute, said all projects under the three Indian LoCs need to be completed in quick times for the interest of trade and investment in both countries. The noted economist also called for political intervention in this regard.