Government moves to untie LoC knots

Government agencies sit today (Monday) to review progress on the US$6.5 billion second and third Indian lines of credit (LoC)-supported projects, as three consecutive LoCs get into jumbles.

Since the process of executing the Indian fund-supported projects shows a very slow pace, Economic Relations Division (ERD) has convened all the implementing ministries and agencies for a sitting to remove hurdles down the execution line, sources said.

The relevant ministries and agencies have undertaken 14 projects under the $2.0 billion LoC-II. And 17 other projects are being planned under the fresh $4.5 billion LoC-III.

Bangladesh and India signed the $2.0 billion LoC deal in March 2016 and the two neighbouring nations signed another Memorandum of Understanding (MoU) on $4.5 billion 3rd LoC this past April.

The credit lines came in the wake of a series of collaborated initiatives between the two sides on trade, transit, investment and regional connectivity and cooperation. The funds are meant, principally, for building necessary infrastructures.        

"We have called an inter-ministerial meeting for Monday. Since the progress on the first $862 million LoC is not satisfactory, we want to remind the executing agencies in the preliminary stages so that they can implement LoC-II and LoC-III in time," said an ERD official.

He told the FE that India had already endorsed 12 out of total 14 projects under the LoC-II over the last more than six months. The remaining two are expected to get through shortly.

"Now we will ask the agencies to inform their update on their respective projects in the meeting Monday. And if they face any hurdles, we will try to work-out ways on how those can be resolved," the ERD official added.

"Besides, we'll ask the agencies which have already sent ERD lists of 17 projects for their inclusion in the LoC-III about their action plans for the implementation of those schemes," he added.

Meanwhile, the first US$862 million LoC-supported seven projects are still struggling for implementation delays even after confirmation of the loan seven years ago, officials said.

Bangladesh Railway (BR) the and Bangladesh Standards and Testing Institution (BSTI) have yet to complete their US$699.07 million-funded

seven projects due to different complexities.

In the last joint project-review meeting in Dhaka last month, the Indian government side had expressed their disappointments over the delays in implementation of the projects under its first LoC.

The interest rate on the credits has been fixed at 1.0 per cent annually with a 20-year repayment term, including a five-year moratorium.

India will charge 0.5 per cent commitment fee on the undisbursed amount after one year from the effective date of each of the loans.

http://print.thefinancialexpress-bd.com/2017/05/29/173800