India-funded projects see sluggish progress
The implementation of the 44-kilometre Dhaka-Tongi-Joydebpur rail line under an Indian line of credit (LoC) has manufactured progress of 31.2 % since its construction began 11 years ago.
Other infrastructure projects staying funded by India are likewise facing delays and upward cost revisions.
To resolve the problems, the Economic Relations Division (ERD) keeps regular meetings with collection ministries and Indian contractors and additional officials, but the rate of implementation has been slower.
Since 2010, India has disbursed 10.03 per cent of the $7.36 billion pledged as loans.
So far, 46 projects have been taken up underneath three Indian LoCs, of which 14 projects linked to the procurement of buses, trucks and different vehicles were completed.
The rest of the 32 projects suffer from slow implementation.
Officials of the relevant ministries and the ERD blamed bureaucratic red-tape, the conditions of the LoCs, inexperience and too little planning the delay. Dealing with too many projects in addition has been a principal trigger.
"India does not have any experience in providing large loans to any country other than Bangladesh," explained Ahsan H Mansur, executive director of the Insurance plan Research Institute.
Besides, the Indian bureaucrats like to handle the problem very cautiously, which causes a massive holdup, he said.
When bureaucrats have encounter in working with government-to-government project financing, negotiations move extremely fast, he added.
Mustafizur Rahman, a good distinguished fellow of the Centre for Plan Dialogue, said that completing specific formalities before implementing the jobs under Indian LoCs was extremely time-consuming.
"But the dawdling tempo is not just because of the problems of donors but likewise that of Bangladesh," Rahman said.
It has been observed that while the projects recognized by Bangladesh under the three LoCs do address the country's infrastructure and procurement necessities, the rate of implementation, particularly for the infrastructure jobs, has been relatively slow.
These delays have resulted in cost escalations, which also disrupt the optimality of other related projects. This, in turn, is normally undermining the potential great things about these projects.
"So, both Exim Lender of India and the concerned agencies in Bangladesh ought to be extra proactively engaged found in resolving these concerns to make sure speedy implementation," Rahman explained.
The just lately constituted high-level physique tasked with monitoring the progress of LoC-funded projects will hopefully manage to change lives in this regard, he added.
The process of securing approval to implement a project is different for India in comparison to other creation partners, according to ERD officials.
For example, for the assignments bankrolled by bilateral and multilateral loan providers, including China, the World Bank and the Asian Development Bank, approval should be extracted from the Executive Committee of the Countrywide Economic Council (Ecnec) before mortgage loan agreements are signed.
However, India announces the funding dedication before finalising the project list. The detailed job plans, feasibility analysis and acceptance from the Ecnec will be done afterwards.
Project implementation on Bangladesh typically faces delays at the execution level. Besides, in each level of a project, the Bangladesh side needs to take approval from the Indian authority.
Relating to Indian procurement conditions, at least 75 per cent of the products and services required for a project ought to be bought coming from the neighbouring nation. At most, this may be relaxed to up to 65 per cent.
Officials of the implementing firms said that such a condition was one of the key obstacles to the delay found in project implementation.
An ERD official said these were in talks with the Indian area to relax the circumstances.
In terms of projects funded by China, a Chinese company must be chosen as the applying agency, which proceeds aggressively to finished the work, said an official of Bangladesh Railways on condition of anonymity.
But in the circumstance of India-backed projects, a good tender is floated to appoint a good contractor, that is a time-consuming process.
In that case, the Indian contractor appoints local sub-contractors to complete different parts of the project, an activity that also creates challenges.
"The bureaucracy on India is almost the same as on Bangladesh," he added.
Under the primary LoC involving $862 million, 12 out of 15 projects have been completed. Two of the 15 projects beneath the second LoC, regarding $2 billion, were applied so far.
Meanwhile, none of the 16 projects under the third and the major LoC, involving $4.5 billion, have been completed.
Under the initial LoC, the $78.10 million Kulaura-Shahbazpur railway line job realized physical progress of 25 per cent over the last 11 years.
Similarly, the Khulna-Mongla railway project involving $399 million saw the progress of 75 %. The implementation offers been delayed by the cyclone Amphan and the ongoing Covid-19 pandemic.
ERD officials earlier said that India would disburse $40 million annually against the LoCs, however the process slowed up in 2020 due to the coronavirus outbreak.
However, they desire to raise the total $150 million this fiscal year.
RECENT INITIATIVES
According to financing ministry officials, the execution of the projects under the LoCs has remained stagnant seeing that April this past year due to Covid-19.
To fast-monitor implementation, discussions were held between your two sides during Indian Foreign Secretary Harsh Vardhan Shringla's go to to Dhaka in August this past year.
Since that time, the implementing ministries, the ERD and the Cabinet Division have become considerably more proactive. Besides, a high-level monitoring committee was produced to expedite the implementation.
The ERD secretary and the Indian high commissioner to Bangladesh will lead their respective sides in the committee.
