‘Slow Disbursal, Execution’: Bangladesh Considers ‘Withdrawing 3 Rail Projects Under India Line Of Credit’

<p>The Bangladesh government is considering to withdraw at least three rail projects involving over $800 million from the Indian loan-funded portfolio, officials said, as reported by Dhaka-based news platform The Business Standard.</p>
<p>It is being reported that those projects have shown little progress despite prolonged implementation periods. The Economic Relations Division (ERD) has been looking for other financing options instead of Indian credit for these projects, as poor disbursement and slow execution have already caused additional requirements of nearly $770 million.</p>
<p>The officials stated that delays in getting approval from Indian authorities’ have also hindered the implementation of these projects. As per the details, a decision on this will be reached in the upcoming progress review meeting on Indian Line of Credit (LoC) projects, scheduled for tomorrow in the capital city of Bangladesh.</p>
<p>While, the Indian delegation team will be led by Suja K Menon, director for credit lines at Ministry of External Affairs, Bangladesh will be represented by Mirana Mahrukh, additional secretary of ERD’s Asia Wing.</p>
<h2>Three Projects May Be Removed</h2>
<p>The Business Standard has quoted a railway sources and reported that at least three projects may be removed from the LoC list during the review meeting. It stated that if India does not commit to providing extra financing, then Bangladesh will make a final decision on these projects during the meeting.</p>
<p>SM Salimullah Bahar, chief planning officer of the Bangladesh Railway, said that complexities in the approval process significantly delay project implementation. According to him, these projects have been ongoing for years, causing increase in cost.</p>
<p>The construction of the dual gauge railway line from Bogura to Sirajganj project was allocated $379.29 million in Indian credit. Implementation began in 2018, however, due to delays, an additional $300 million has been requested from India.</p>
<p>Initiated in the same year, the Khulna-Darsana rail line and dual gauge line from Parbatipur to Kaunia Section projects also require additional funding.</p>
<p>As of now, Indian credit allocations stand at $312.48 million for the Khulna-Darsana project, with an additional $350 million required for full implementation. The Parbatipur to Kaunia project has been allocated $120.41 million, but an extra $120 million is now needed, The Business Standard reported.</p>
<p>According to the details, this estimate is based on 2023 calculations, which implies that the current requirements could be even higher, according to railway sources. It was reporetd that over the past six years, the disbursement rate of Indian loans for the three rail projects has been just 1%. After the new interim government took the charge, a review of stalled Indian LoC projects was initiated. The decision was made to withdraw from projects that show no substantial progress unless they can be expedited.</p>
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