Bangladesh seeks to make 50-per cent procurement from outside India under the ongoing Line of Credit (LoC) financing programme for what insiders say ensuring quality development works with the borrowed money.
Since Bangladesh's project-implementing agencies are facing problems in complying with exiting 75-percent-procurement condition under the LoCs, Dhaka in a review meeting Sunday requested New Delhi for relaxing the terms, they said Monday.
The government also called upon the Indian side to expedite disbursement of the US$7.862 billion worth of LoCs India already committed, says a Ministry of Finance (MoF) official.
Official data show that India disbursed only $120 million in loan during the first eight months (Jul-Feb) of the current fiscal (FY) 2021-22.
A high-level project-monitoring committee comprising the Economic Relations Division (ERD) of Bangladesh, the Indian High Commission in Dhaka and the Indian EXIM Bank and others attended the review meeting on progress in LoC execution.
Co-chaired by ERD Secretary Fatima Yasmin and Indian High Commissioner in Bangladesh Vikram Doraiswami, the meeting was attended by representatives from Bangladesh Prime Minister's Office, the Ministry of Foreign Affairs, the National Board of Revenue, Finance Division and the Ministry of Home Affairs.
"We have sought simplification of the LoC procurement conditions and allow Bangladesh up to 50 per cent of goods import from the international market as the country wants to ensure quality procurement against different projects," a senior MoF official told the FE.
Currently, the lending deals allow Bangladesh to procure 25 per cent of goods, works or services from Bangladesh market and the remaining 75 per cent from India under the $862 million LoC-I, $2.0 billion LoC-II and $4.5 billion LoC-III recipes.
After long-drawn negotiations, New Delhi had recently allowed Bangladesh to procure up to 35 per cent of goods, works or services from the domestic market only for the civil-work-intensive projects.
Under the current terms and conditions, Bangladeshi project-implementing agencies will have to make 75-per cent procurement from India's domestic market.
Officials from government agencies say they sometimes want to procure high-quality products, especially the high-tech ones which may not be available on the Indian market.
"Sometimes, we may get particular products from the Indian market. But we have our own specifications of those products which may not match with the Indian ones. For those products, we want to go for international biddings," says a senior government official.
The MoF official said: "Indian authority is sometimes taking much time to endorse some project proposals and procurement contracts. Those are hampering project execution in time. So, we have requested them at the review meeting to speed up their approval process."
Meanwhile, an ERD official said: "The review of the projects under the multibillion-dollar Indian LoCs was aimed at removing obstacles on way to their execution."
MoF officials say the progress of some of the aided projects, especially under the LoC-II and LoC-III, is still unsatisfactory.
Government officials say the project-implementing agencies have so far failed to complete three development projects under the LoC-I, confirmed 12 years ago in August 2010.
Bangladesh government took 15 projects under the LoC-I after the confirmation of the $862 million loan in August 2010.
Besides, the implementing agencies couldn't sign commercial contracts for even half of the proposed development projects under the $2.0 billion worth of LoC-II and $4.5 billion worth of LoC-III due to procurement complexities, another MoF official says.
