India gives $1b for projects facilitating transshipment// Delhi to allow Nepal transit to Bangladesh

DIPLOMATIC CORRESPONDENT
Bangladesh signed a one billion US dollar loan agreement with Indian Exim Bank yesterday at state guest house Jamuna in the city for development of its infrastructure projects in areas of road, railway and river dredging mainly aimed at facilitating transit and transshipment of Indian goods to its north-eastern states. Indian finance minister Pranab Mukherjee, who arrived in the city at 3:40pm yesterday on a short working visit, and Finance Ministers of Bangladesh Abul Maal Abdul Muhith witnessed the signing ceremony. The agreement was signed by Economic Relations Division (ERD) secretary Musharraf Hossain Bhuiyan and Chairman and Managing Director of Exim Bank of India TCA Ranganathan. Both the finance ministers said, the terms of the loan are 'extremely fabourable' though the country's main opposition BNP opposed the deal for its 1.75 percent interest rate, 0.5 per cent commitment fee and 20 years repayment period (including 5 years' grace period). BNP said, the rate of interest is very high compared to the World Bank and ADB.

After the signing of the agreement, in a joint press briefing at Jamuna, Pranab Mukhajee said that the line of credit for Bangladesh was the single largest credit package of New Delhi for any other country.
On the other hand, Muhith said that till date the credit was double than what India had provided to Bangladesh since its independence in 1971.
Muhith said, the Bangladesh government will utilise the money for implementing development projects, mainly for rail and road communication.
Bangladesh and India in the meantime identified some 14 projects to be implemented under the US$ 1 billion line of credit.
Muhith said Bangladesh would serve as the best transit service-providing country in the South Asian region. He said Bangladesh could provide transit facilities to Bhutan, India, Nepal, Myanmar and China.
The Bangladesh finance minister said the projects will be identified and approved by the Bangladesh government but in his statement his Indian counterpart said, the two countries would identify those.
However, India has facilitated the credit in line with the Indian Prime Minister's announcement during the visit of Prime Minister Sheikh Hasina to India on January 10-13. According to the Bangladesh-India joint communiqué, US$ 1 billion credit will be used for a range of projects, including railway infrastructure, supply of BG locomotives and passenger coaches, procurement of buses, and dredging projects.
In his speech, Pranab Mukherjee said New Delhi has decided to export three lakh tonnes of rice and two lakh tonnes of wheat to Bangladesh though India still is continuing its ban on export of food grains.
"We are committed to assisting Bangladesh in addressing its priorities for development and in its immediate requirements and it is in that spirit that we have just agreed to export three lakh tonnes of rice and two lakh tonnes of wheat," Mukherjee said.
Referring to the joint communiqué, the Indian finance minister said, India will allow Nepal to carry its products to and from Bangladesh.
He said his country would remove non-tariff barriers for access of Bangladesh products to the Indian market.
He said, "We will soon have in place arrangements to allow trucks from Nepal to enter the Bangladesh side of the land customs station at Banglabandha". He, however, did not say whether India will allow Nepal and Bhutan to export their products by using Bangladesh ports.
"We have already identified two areas on Meghalaya border to set up border haats," Mukherjee said and added that the proposed haats (market) would start soon.
He said his country has agreed to revive the land customs stations along the Tripura- Mizoram border, build a bridge over the common river Feni at Sabroom-Ramgarh point, and strengthen other border infrastructures.
Replying to a question, Pranab Mukherjee said his country 'deeply appreciates' Bangladesh's efforts to tackle terrorism.
In response to another question, he said his country would remove non-tariff barriers for access of Bangladesh products to the Indian market.
The Indian finance minister had talks with Muhith and foreign minister Dr Dipu Moni at the Jamuna.
He had a one-on-one meeting with Prime Minister Sheikh Hasina before going back home last night.
Earlier, a red carpet was rolled out at Hazrat Shahjalal International Airport as Pranab Mukherjee arrived at the airport. A special Indian air force jet carried the influential leader of India's ruling Congress-led government while his Bangladesh counterpart Abul Maal Abdul Muhith received him on the VVIP tarmac at the airport, where a tiny tot presented a bouquet to him.
Later, during his talks with Dr Dipu Moni, Bangladesh and India agreed to implement decisions made during the visit of Prime Minister Sheikh Hasina to India in January last to ensure equitable benefits for both the neighbours, said a press release of the Foreign Office yesterday.
The foreign ministry press release said, the two ministers discussed overall direction of bilateral relations and in particular reviewed progress in the implementation of the decisions taken during the visit of the Bangladesh Prime Minister to India.
Expressing his happiness at the signing of the Credit Line Agreement, Pranab Mukherjee said this is yet another leap forward in Bangladesh-India relations. Now the challenge is to identify the projects and implement them to bring mutual benefits for the peoples of the two friendly countries, added the Indian finance minister.
Dr Dipu Moni highlighted the imperative to make progress on sharing of the Teesta waters which was appreciated by the visiting minister. She also raised the issue of greater connectivity among the countries in the neighborhood and development of sub-regional projects. She underlined the immense potential of collaboration in the power sector and opined that countries in the region should harness water resources for power.
Dr. Dipu Moni reiterated early resolution of the outstanding land boundary issues in the spirit of the Land Boundary Agreement signed in 1974. The ministers agreed on the immediate holding of meetings to discuss all unresolved boundary issues. This would add momentum to the ongoing process of cooperation, she added.
High Commissioners of the two countries, Acting Foreign Secretary and other senior officials attended the meeting.

published by The Independent on 8 Aug 2010