India has asked Bangladesh to complete all official procedures of the projects under its second and third lines of credit with the view to speeding up implementation.
The High Commission of India in Bangladesh has recently written to the Economic Relations Division (ERD) in this regard, said a senior official of the division.
Bangladesh’s Foreign Minister AK Abdul Momen recently told The Daily Star that Dhaka also wants speedy disbursement of Indian LoCs as the projects under the funding are facing delays mainly due to technical and bureaucratic reasons.
In the last eight years, Bangladesh managed to use $523.60 million of the first LoC worth $862 million despite various steps to expedite utilisation of funds.
Dhaka has so far used $15.60 million of the $2-billion second LoC. India is yet to disburse any money from the $4.5-billion third LoC.
The letter of the High Commission called for a faster processing of the bills for the ongoing projects, the ERD official said.
It said Bangladesh is using a method in the projects funded by other development partners, where the bills go directly from the project director to funding agencies. For such cases, the bills may be sent directly to Exim Bank of India, according to the letter.
The issue was raised with Indian External Affairs Minister S Jaishankar in Dhaka on Tuesday.
The official said the ERD wrote to the line ministries, which are implementing the projects under the LoCs, to process the bills within a couple of weeks after they are submitted.
“We just forward the bills to the High Commission of India for approval so that the Exim Bank of India pays the bill on time,” he said.
Under the first LoC, 12 projects out of 15 have already been implemented. The remaining projects are currently under implementation. Dhaka and Delhi signed the first LoC in August 2010.
Under the second LoC signed in March 2016, 16 projects have been identified for coverage. Thirteen projects have reached the lending stage for consultancy and goods procurement. The third LoC was signed in October 2017 and 17 projects have been initially identified for financing.
India has extended approval for coverage to four projects involving about $1.51 billion. The majority of the remaining projects are under the detailed project report preparation (DPP) stage. According to the India-Bangladesh bilateral review meeting in the first week of July, several projects under the second LoC and the third LoC are in the stage of DPP, which may be expedited.
For large, complex and high-value projects, the provision of a project monitoring committee may be ensured for better supervision and implementation, the minutes of the meeting said. India has also requested Bangladesh to adhere to the recommended timeframe for tendering process and evaluation of proposal and bids.
Total commitments for various development projects under the first three LoCs amount to $7.36 billion. The agreement for the fourth LoC of $500 million has been signed recently for defence purchase, taking the credit commitment to $7.86 billion.