$1b line credit
India to sanction $200m as grantBusiness Desk
Only $1.28m released in 20 months
Indian finance minister Pranab Mukherjee on Sunday said New Delhi had decided that $200 million out of its $1 billion approved loan for Dhaka would be grant while the recipient could use it for any project it considered suitable.
‘Out of the $1 billion line of credit, $200 million will be grant. Bangladesh may utilise the amount [grant] for any project it thinks suitable,’ Mukherjee said in a discussion with selected editors of print and electronic media at the fag end of his two-day Dhaka tour, reports Bangladesh Sangbad Sangstha.
Although finance minister AMA Muhith and his Indian counterpart Pranab in August 2010 signed the $1 billion credit deal, Bangladesh has so far received only $1.28 million for one project for procurement of buses because of bureaucratic bottlenecks of India as well as inefficiency of various Bangladeshi ministries.
Fifteen projects – mostly in the railway sector – worth $750 million are in different phases of implementation but the disbursement of loans for the projects are yet to be made, said officials of the planning ministry.
About 80 per cent projects are aimed at smoothening transit-transhipment with India, Nepal and Bhutan.
As many as 21 projects were taken under the credit line, but in early April, Bangladesh government dropped six projects worth $250 million because of tough conditions given by India. Till now, the government has not decided about any replacement projects.
On the alleged delays in delivering on promises, the Pranab defended the work so far saying that projects worth $ 820 million had already been identified and that five contracts worth $ 214 million had already been signed, reports Bdnews24.com
He said that buses had been delivered, and that coaches and locomotives were on their way.
The main terms and conditions of the credit line agreement include 1.75 per cent interest (fixed) per annum, 0.5 per cent commitment fee per annum on unutilised credit after 12 months from the date of commercial contract approval, and 20 years’ repayment period including a grace period of five years.
As per the conditions of the credit line, 85 per cent of the equipment or work, however, will be provided by the Indians.
Answering a question Pranab said New Delhi had already relaxed the rules of origin criteria for the projects and would consider more flexible terms.
The Indian minister blamed ‘ground realities’ such as lack of majority of the ruling party for failure to seal the Teesta water sharing deal.
‘In a democracy such as ours,’ he said ‘this process often becomes time consuming.’
Asked on the proposed Indian cooperation for power sector in Bangladesh, the Indian minister said Bangladesh might procure 250 megawatt power from open Indian market and another 250 mw from its national grid.
He also spoke of the 1320-mw coal-fired power plant which would be built at Rampal at Bagerhat.
On Tipaimukh, Pranab said a sub-group would look into ‘all aspects’ of the controversial project and reiterated that India would take ‘no unilateral action that would harm Bangladesh.’
He came to attend the concluding ceremonies of a year-long programme marking the 150th birth anniversary of Rabindranath Tagore and hailed the joint venture events as unique and having no parallel in history.
On the likelihood of becoming the first Bengali president of India, the man from Paschim Bangla was all smiles and said ‘nothing is certain in our
situation’ until it actually happened.
Pranab flew in Saturday night by a special aircraft from Manila and gave his Bangladesh counterpart Muhith a lift from the Philippines capital where both attended a meeting of the Asian Development Bank.
Editors who joined the discussion with the Indian minister included Mahbubul Alam of the Independent, Anawar Hossain Manju of the Ittefaq, Golam Sarwar of the Samakal, Moazzem Hossain of the Financial Express, Ihsanul Karim of the state-run news agency BSS, Enayetulah Khan of UNB, Motiur Rahman Chowdhury of the Manavjamin, Shykh Seraj of Chanel i, Altamas Kabir of the Sangbad, Shyamal Datt of the Bhorer Kagoj and Abed Khan.
Indian high commissioner to Dhaka Pankaj Saran also attended the discussion at Sonargaon Hotel in the city.
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