The government has finally decided to procure dredgers for Mongla Port under the second Indian line of credit (LoC) as China did not respond positively for financing the project, sources in ministries concerned and the Mongla Port Authority said. High interest rate of Chinese funding is another reason to opt for the Indian funding, they added saying that China imposes 2 per cent interest plus LIBOR (London Interbank Offered Rate) and 0.25 per cent commitment charge for any loan while India imposes just one per cent interest. The grace period for Chinese funding is 5 years while it is 10 years for Indian loan, the sources said. The government decision came at a meeting on sub-regional cooperation held at the Prime Minister’s Office (PMO) on January 29, meeting sources said. The government made the decision as implementation of the project with Indian financing would benefit the governments of both India and Bangladesh, Mongla Port Authority chairman Commodore AKM Faruque Hassan told The Independent on Saturday.
“Also, the present government wants mutually beneficial ties with our close-door neighbour,” he added. Hassan said, “At least four to five dredgers are needed to keep 130-km river ways, including the 13-km main Pashur channel, navigable round the clock while another one or two maintenance dredgers should be kept standby,” he added.
Shipping ministry sources also said India has evinced keen interest to finance the project for smooth operation of the Mongla Port. This was the reason the government decided to implement the project with Indian financing, they added.
Meanwhile, Prime Minister Sheikh Hasina’s Economic Affairs Adviser Dr Mashiur Rahman, at the January 29 meeting on sub-regional cooperation, directed the shipping ministry to implement the project under the second Indian LoC as China did not respond positively even after showing interest to fund the project.
China had expressed interest to provide support for the procurement of trailing suction hopper dredgers for Mongla Port to dredge Pashur Channel in Bagerhat to ease the movement of vessels.
Accordingly, the Economic Relations Division (ERD) under the finance ministry tried to obtain dredgers for Mongla Port Authority from China, but it did not happen. At the meeting, shipping ministry representatives said financing can be arranged under the second Indian LoC.They also informed the meeting that dredgers with 11 accessories will be required for Mongla Port at a cost of USD 60 million.