Three Indian LoC-1 projects crawling even after a decade

Three railway projects under the first Indian Line of Credit (LoC) signed a decade ago have not been completed yet because of a delay in loan processing and approval procedure by the Indian authorities.

The sluggishness of the Indian contractor agency has also been hampering the implementation of the projects, said the Khulna-Mongla Port Rail Line Project director.

These three railway projects got $510.12 million from the Indian authorities.

A recent LoC review meeting decided that the deadline and estimated costs of the projects need to be revised due to the slow progress. The meeting was held at the Prime Minister's Office chaired by Dr Mashiur Rahman on February 6, 2020. The minutes of the meeting were published on February 19.

Multiple meetings had been held earlier between officials of Bangladesh and India to identify implementation challenges in the projects, but these did not produce any significant results.

Under LoC 1, only 12 projects out of 15 have been completed so far because India has disbursed 66.63 percent of its committed funding.

So far, $565.76 million out of $862 million has been disbursed under the first LoC which was signed on August 7, 2010.

The Bangladesh government signed an agreement with the Exim Bank of India for $1 billion under the first LoC of which $200 million was declared as a grant by the Indian government. Later, India provided $62 million as an additional fund from the initial amount.

However, India has disbursed only 2.38 percent of its committed fund from the second Line of Credit, and 0.03 percent from the third one.

So far, only $47.67 million out of $2 billion under the second LoC, which was approved in 2016, has been disbursed.

The third LoC was signed in October 2017 and only $1.40 million out of $4.5 billion has been disbursed for it.

Incomplete projects of the first Indian LoC
Railway officials say the construction of the Khulna-Mongla Port Rail Line Project is being delayed due to the slow approval processing and the sluggishness of the Indian Railway Construction Company (IRCON).

The project, which has two parts, started in 2010 under the first LoC. The first part consists of the construction of rail tracks, a dam, and some civil work. The other part consists of several major and minor bridges, including a bridge over the Rupsa River.

However, all construction in the project has been running behind schedule.

At present, the piling of the middle pillar of the Rupsa bridge is going on. Installation of the main span is expected to complete by September 2021. Officials said the project proposal needs further revision.

The financial progress of the project is about 63 percent and the physical progress is about 61.90 percent.

Ramjan Ali, project director of the Khulna-Mongla Port Rail Line Project, told The Business Standard, "Right now the main problem in the project is the Indian contractor agency IRCON. They do not work regularly. In the last fiscal year, they did some work reluctantly, and this year they are doing the same. The railway secretary reprimanded the contractor agency on Sunday for their sluggishness."

Another incomplete project under the first LoC is the construction of the 3rd and 4th dual-gauge train lines on the Dhaka-Tongi route, and the doubling of the dual-gauge line on the Tongi-Joydevpur route. This project started in July 2012.

Railway officials said the financial progress of the project was 22.38 percent and the physical progress was 28.50 percent till December 2019.

"The main work of the project started last year. The project was delayed because of the lengthy approval process of the Indian authorities and of the Exim Bank of India. Now the deadline for the project has to be revised," said Ramjan Ali.

Rehabilitation of the Kulaura-Shahbazpur section project begun in July 2011. As of December 2019, the financial progress of the project was 14.64 and the physical progress was 16.30 percent.

Railway officials said the contractor firm is yet to mobilise the plants and equipment of the project.

Second and third Indian LoCs
Only two projects out of 15 under the second LoC have completed. Those are the Procurement of Trucks and the Procurement of Double Decker and Single Decker AC and non-AC Buses.

The two ongoing projects are Procurement of Equipment and Machinery for Road Infrastructure, and Establishment of IT/Hi-Tech Park at District Level (12 districts).

Nine projects are in the procurement stage and two are in the planning stage under the second LoC agreement.

Fifteen projects have been identified under the third LoC. Among them, three are in the procurement stage and 12 are in the planning stage.

Construction of New Dual Gauge Rail Line from Bogura to Shaheed M Monsur Ali Station, Development of Rail and Road Based ICD at Ishwardi, Payra Port Multipurpose Terminal, Upgrading of Mongla Port, Bay Container Terminal in Chattogram Port, Establishment of Special Economic Zone (Indian Zone) at Mirsarai, Infrastructure Development for Power Evacuation Facilities of the Rooppur Nuclear Power Plant are set to be implemented under the third Indian LoC.