The implementation of Indian Line of Credit (LoC) projects in Bangladesh will get a momentum as many of those would now hit the execution stage, said Pankaj Kumar Singh, Adviser of the Indian Ministry of External Affairs, BSS reports.
"Many projects under Indian LoC will now hit the execution stage as solid tendering and contracting of those have been done," he said.
Pankaj said this while interacting with local media at the Indian High Commission in Dhaka this evening after a two-day 19th LoC Projects review meeting with the government of Bangladesh. Saroj Khuntia, General Manager, EXIM Bank India also spoke on the occasion.
The 19th India-Bangladesh LOC Review Meeting was held in Dhaka on 27-28 October 2021, to review progress of 43 projects being taken up for implementation under GoI Lines of Credit (LOCs) extended to the Government of Bangladesh. Sridharan Madhusudhanan, Joint Secretary (DPA-I), Ministry of External Affairs, Government of India led the Indian delegation and the Bangladesh delegation was led by Md Shahriar Kader Siddiky, Additional Secretary, ERD, Ministry of Finance, Government of Bangladesh.
Representatives of Indian companies executing the LOC projects in Bangladesh also participated in the meeting.
Pankaj said out of the total amount of $7.862 billion committed against three LoC projects, the disbursement to Bangladesh have so far reached $865 million and it is expected to reach the landmark of $1 billion by the end of this fiscal year (FY22).
Mentioning that Bangladesh is the single largest recipient of Indian LoC projects with a portfolio of $7.862 billion, Pankaj said so far some 14 projects have been completed out of 43 projects under the three LoCs.
He informed that the Indian LoC to Bangladesh bears an interest rate of 1.0 per cent having a grace period of 5 years to be repaid in 20 years.
The Adviser of the Indian Ministry of External Affairs noted that it usually takes time in Bangladesh from identifying a project to the execution stage and this needs to be done in a less timeframe.
"We've to push or accelerate the contracting process," he added.
Pankaj also opined that the project preparation stage needs to be expedited.
Asked about the Indian LoC projects which would be completed soon, Pankaj said that they are hopeful that the Khulna-Mongla Railway project would be completed by the end of next year.
Besides, he informed that around 85 per cent of the Rooppur Nuclear Power Evacuation project has so far been completed while the remaining 15 per cent work would be done within the next few months.
Apart from this, Pankaj was also hopeful about the completion of the street lightening project in Chattogram within the stipulated timeframe.
He also informed that the Tongi-Joydevpur section of the Dhaka-Tongi Railway Track is in advance stage and would be completed within the next few months.
Apart from this, the Adviser said that the supply of road construction and maintenance equipment project under the Indian LoC would be completed by the middle of next year.
Highlighting some salient features of the Indian LoC, Pankaj informed that some 65 countries have so far received Indian LoC with a volume of around $31 billion. The overall portfolio of Indian LoC was only $10 billion nearly six years back.
He said more than 600 projects have been identified under Indian LoC across Asia, Africa, Latin America and out of those, some 350 projects have already been completed.
Pankaj said the attractiveness, effectiveness and delivery of the projects have led the host countries to take more LoC projects which usually are concessional loans.
He said the Indian LoC loans focus partnership of equals, there are no conditionalities while those are completely demand driven by the national priorities of the partner government.
Asked about the comparatively high interest rates under Indian LoC, the Adviser of the Indian External Affairs Ministry said, "We don't want to say we're the softest. But, this is the best loan that we can offer...there is no such conditionalities at all."
The Total disbursements as of 25 October 2021 are approximately $ 865 million. Under the first LOC of USD 862 million, 12 out of 15 projects have already been completed and 3 projects are under execution.
Under the second LOC of $2 billion, two projects are already completed and the other projects are under various stages of implementation. Under the third LOC of $4.5 billion, one project has reached execution stage, while the other projects are under various stages of DPP finalisation and tendering.
According to the Indian High Commission, there is considerable improvement in the speed of projects reaching execution/tendering stage which has been made possible with active cooperation of the project-executing agencies of both sides and with the extensive coordination efforts between the ERD and the High Commission.
With award of more than $990.85 million worth of contracts under the GoI LOCs during the past three years, and another $325.58 million being finalised within the next few months, the utilization rate of LOCs is set to increase significantly in the near future.
During the LOC Review Meeting, both sides expressed satisfaction with the robust cooperation on LOC projects.
A detailed discussion was held, Line Ministry-wise, to review project progress. Existing issues with project implementation and possible resolution mechanisms were identified. Detailed time lines were determined for all steps involved in project implementation.
Both sides agreed that the LOC review mechanism is an ideal platform to monitor the progress of projects, understand and remove procedural bottlenecks and ensure timely implementation.
The Indian delegation comprising MEA officials from Delhi, High Commission of India officials and Exim Bank of India officials visited the LOC project site for the Power Evacuation facilities of the Rooppur Nuclear Power plant, the Ashuganj Inland River Port project site as well as the Ashuganj-Sarail-Dharkhar-Akhaura Road project site on 25-26 October 2021.
The delegation met all the stakeholders involved in project implementation and in-depth discussions were held to review project progress and resolve the impediments to project progress.
It was agreed that the 20th Bilateral LOC Review Meeting would be held in Delhi in April 2021.