Third Indian LoC
Dhaka readies list of 17 projects
Pact to be inked during PMs visit to New Delhi next month
JAGARAN CHAKMA
Bangladesh has finalised a list of 17 projects, involving a total of USD 3.57 billion or approximately Tk. 28,650 crore, for the third Indian line of credit (LoC) that is likely to be signed during the upcoming visit of Prime Minister Sheikh Hasina to New Delhi in April.
However, officials of the finance ministry said there is a possibility to increase the actual amount of the LoC.
Bangladesh and India will sign the pact to expand Indian investments in the country when PM Sheikh Hasina visits the neighbouring country on April 8 and 9.
The Economic Relations Division (ERD) has sent the list to the finance ministry for the approval of finance minister Abul Maal Abdul Muhith. Again, the PMs economic affairs adviser, Mashiur Rahman, has given his consent to the list of projects that will be implemented under the third LoC.
According to the sources at the finance ministry, the Prime Ministers Office (PMO), the foreign ministry and the Indian high commission will be informed about the list of projects.
Meanwhile, the PMO has directed the ERD to include the projects for transport and communication sectors in the list. Of the total, 13 projects are related to the transport and communication sectors, one is for the Bangladesh Economic Zone Authority (BEZA) and two are connected to the power sector. The remainder will be grant-based projects.
This will be Hasinas first official visit since the Narendra Modi-led government assumed power in May 2014. Hasina was scheduled to visit India in December last year, but the trip was postponed. Officials of the two countries are now sorting out details to finalise the upcoming visit.
India has already given USD 1 billion and USD 2 billion through the first and second LOCs it has respectively extended to Bangladesh.
The loans have repayment terms of 20 years each, including a grace period of five years, and a one per cent annual interest rate along with a 0.5 per cent commitment fee.
The projects that have been primarily selected are: the Buriganga river (new Dhaleswari-Pungli-Bangshi-Turag-Buriganga river system) restoration project (USD 196.18 million), the Ashuganj-Zakiganj route (USD 38 million), the Payra port dry bulk coal terminal (USD 300 million), the Payra port multipurpose terminal (USD 350 million), construction of a new dual-gauge rail line from Bogra to Shahed M Monsur Ali Station in Sirajganj (USD 501.23 million), development of rail- and road-based inland container depot (ICD) at Ishurdi (USD 35 million), upgrade of land customs stations (LCSs) to integrated check posts (ICPs) on both sides (no estimate yet), construction of an economic zone at Mirsarai (USD 50 million), Bogra-Jharkhand (India) 400-kv transmission line project (USD 177.04 million), Mollahat 100 MW solar PV power plant (USD 157.68 million), Gazipur 450-MW combined cycle power plant (USD 402.41 million), infrastructure development for power evacuation facilities of Rooppur Nuclear Plant (USD 940 million), four-laning of Comilla-Brahmanbaria-Sarail road (USD 75 million), establishment of special economic zone (USD 300 million) and development of a BEZA special economic zone in Payra or Moheshkhali (USD 100 million). Regarding the upcoming deal, officials believe that the Indian government wants to compete with China, which inked a huge deal of over USD 24 billion during its president Xi Jinpings visit in October.
However, they pointed out that though the Chinese credit is huge, there is no guarantee that it would come immediately. Besides, the interest rate is comparatively higher. India had provided a USD 1-billion line of credit at 1 per cent interest rate. The Chinese rate is at least 2 per cent plus London Interbank Offered Rate (LIBOR), 0.25 per cent management fee, and 0.25 per cent commitment charge.
