$2 billion Indian Line of Credit

65pc of raw materials to be procured from India

At least 65 per cent of the raw materials required for implementation of projects under the fresh Indian Line of Credit (LoC) of $2 billion will have to be procured from India, sources in the Finance Ministry have said. The procurement threshold from India could even extend to 100 per cent depending on the nature and type of the project. These provisions will be applied for projects under the BRTC, Railway division and Power division, the sources added.
Moreover, only Indian companies will be allowed to participate in the bidding process, though officials claim there are no specific terms and conditions on this aspect. As per the agreement, implementing agencies will have to purchase 65 per cent of raw materials from India, leaving the remaining 35 per cent to be procured locally. The local procurement will be done on recommendation by the Indian consultant.
Senior Secretary at the Economic Relations Division (ERD) Mohammad Mejbahuddin told The Independent that the terms and conditions of the fresh loan will be similar to those of the earlier loan. The first Indian LoC carried an annual interest rate of 1.75 per cent, which was later lowered to 1 per cent by India. The loan has to be repaid in 20 years with a grace period of five years. “Around 75 per cent of the overall procurement for the projects has to be made from India. In case of civil procurement, it will be 65 per cent,” Mejbahuudin said, adding that the procurement conditions could also be eased for smooth implementation of a project.
“The implementation of the projects under fresh LoC will be easier as compared to earlier as the projects have already been selected,” he said. A Memorandum of Understanding (MoU) in this regard was signed between ERD Senior Secretary Mohammad Mejnahuddin and Indian External Affairs Secretary Dr S Jaishankar during the visit of Indian Prime Minister Narendra Modi from June 6 to 7. The announcement of the fresh LoC came from the Indian Prime Minister in a joint statement issued at the Prime Minister's Office of Bangladesh on June 6. “We are pleased to  extend another line of credit of $2 billion to support infrastructure and other development activities in Bangladesh,” Modi said. “Our development partnership is scaling new heights.
“We stand at a moment of huge opportunity in our relationship. Prime Minister Hasina and I recognise that,” the Indian Prime Minister said, adding that Indian investments in Bangladesh will help. “I will also try to make trade smoother and easier, including at the border. The agreement on standards and testing is a step in that direction,” he observed. Senior Secretary of the ERD told The Independent that they had earlier proposed 13 projects critical for social and infrastructure development in Bangladesh. The projects proposed to the authorities included those in the fields of power, road transport, Railways, Information and Communication Technology (ICT), shipping, health and technical education.
India's move to extend a fresh LoC comes on the heels of Foreign Minister A H Mahmood Ali seeking one during his visit to the neighbouring country in September last year. Some projects finalised by the ERD could avail funding from the second LoC. These include procurement of 500 tracks for BRTC for USD 35.39 million and double-decker and articulated buses for BRTC at USD 44.10 million. Procurement of equipment and machinery for roads and highways for USD 49.49 million could also be done through the fresh Indian LoC.
Projects regarding higher education and skill development in ICT for $10 million, establishment of IT/hi-tech parks in twelve districts for $193 million could also see some help with the amount. The Barapukuria-Bogra-Kaliakoir 400 KV line project for USD 210.67 million; construction of new carriage workshop in Syedpur railway workshop including feasibility study for $85 million; conversion of metre gauge line to dual gauge line in Parbatipur-Kawnia section of Bangladesh Railway for USD 105 million; construction of a double line, including signalling, on the Khulna-Darshana section of Bangladesh Railway for USD 300 million; are also some crucial infrastructure projects finalised by the ERD that could be funded through the new Indian LoC.

$2 billion Indian Line of Credit

65pc of raw materials to be procured from India

At least 65 per cent of the raw materials required for implementation of projects under the fresh Indian Line of Credit (LoC) of $2 billion will have to be procured from India, sources in the Finance Ministry have said. The procurement threshold from India could even extend to 100 per cent depending on the nature and type of the project. These provisions will be applied for projects under the BRTC, Railway division and Power division, the sources added. Moreover, only Indian companies will be allowed to participate in the bidding process, though officials claim there are no specific terms and conditions on this aspect. As per the agreement, implementing agencies will have to purchase 65 per cent of raw materials from India, leaving the remaining 35 per cent to be procured locally. The local procurement will be done on recommendation by the Indian consultant. Senior Secretary at the Economic Relations Division (ERD) Mohammad Mejbahuddin told The Independent that the terms and conditions of the fresh loan will be similar to those of the earlier loan. The first Indian LoC carried an annual interest rate of 1.75 per cent, which was later lowered to 1 per cent by India. The loan has to be repaid in 20 years with a grace period of five years. Around 75 per cent of the overall procurement for the projects has to be made from India. In case of civil procurement, it will be 65 per cent, Mejbahuudin said, adding that the procurement conditions could also be eased for smooth implementation of a project. The implementation of the projects under fresh LoC will be easier as compared to earlier as the projects have already been selected, he said. A Memorandum of Understanding (MoU) in this regard was signed between ERD Senior Secretary Mohammad Mejnahuddin and Indian External Affairs Secretary Dr S Jaishankar during the visit of Indian Prime Minister Narendra Modi from June 6 to 7. The announcement of the fresh LoC came from the Indian Prime Minister in a joint statement issued at the Prime Ministers Office of Bangladesh on June 6. We are pleased to extend another line of credit of $2 billion to support infrastructure and other development activities in Bangladesh, Modi said. Our development partnership is scaling new heights. We stand at a moment of huge opportunity in our relationship. Prime Minister Hasina and I recognise that, the Indian Prime Minister said, adding that Indian investments in Bangladesh will help. I will also try to make trade smoother and easier, including at the border. The agreement on standards and testing is a step in that direction, he observed. Senior Secretary of the ERD told The Independent that they had earlier proposed 13 projects critical for social and infrastructure development in Bangladesh. The projects proposed to the authorities included those in the fields of power, road transport, Railways, Information and Communication Technology (ICT), shipping, health and technical education. Indias move to extend a fresh LoC comes on the heels of Foreign Minister A H Mahmood Ali seeking one during his visit to the neighbouring country in September last year. Some projects finalised by the ERD could avail funding from the second LoC. These include procurement of 500 tracks for BRTC for USD 35.39 million and double-decker and articulated buses for BRTC at USD 44.10 million. Procurement of equipment and machinery for roads and highways for USD 49.49 million could also be done through the fresh Indian LoC. Projects regarding higher education and skill development in ICT for $10 million, establishment of IT/hi-tech parks in twelve districts for $193 million could also see some help with the amount. The Barapukuria-Bogra-Kaliakoir 400 KV line project for USD 210.67 million; construction of new carriage workshop in Syedpur railway workshop including feasibility study for $85 million; conversion of metre gauge line to dual gauge line in Parbatipur-Kawnia section of Bangladesh Railway for USD 105 million; construction of a double line, including signalling, on the Khulna-Darshana section of Bangladesh Railway for USD 300 million; are also some crucial infrastructure projects finalised by the ERD that could be funded through the new Indian LoC.