Foreign ministry feels being left out/ Indian credit utilisation

Foreign ministry feels being left out
Indian credit utilisation

Saturday, 01 January 2011
Author / Source : ANIS ALAMGIR


Dhaka, Dec 31: The foreign ministry has not yet got an official copy of US$ 1 billion Line of Credit agreement from the finance ministry four months into the signing of the deal with India in Dhaka in August, exposing a dismal state of coordination among line ministries. The loan will be spent for projects in the road, railway, river dredging and power sectors.
Implementation of the development projects and other decisions as a follow-up to the joint communiqué involves a number of ministries and lack of coordination among them might leave the things in limbo and limit Bangladesh’s real gains from the loan, officials feared.

The loan deal has been marked with questions from the day it was signed, with critics saying that the high-cost loan would be used in projects to facilitate transit of Indian goods which will mainly benefit India. Bangladesh has remote possibility to gain from transit, they argue.
The deal is a part of the joint communiqué signed in January 2010 in New Delhi between Bangladesh’s Prime Minister Sheikh Hasina and Indian premier Manmohan Singh.
Foreign ministry officials Friday claimed that they were kept in the dark on the progress so far made on the joint communiqué.
“Though we have a copy of the billion dollar loan agreement, but officially we didn’t get any copy from Economic Relations Division (ERD) of the finance ministry,” complained a top official of the foreign ministry, who wanted not to be quoted.
“Not only that, we don’t know anything about the progress so far made on 14 projects to be implemented under the US$ 1 billion line of credit. We don’t have any updates on the purchase of 100 locomotives, some buses and modernization of BSTI. We are also in the dark about purchase of dredgers,” the official said.
The ministry was not even consulted when the shipping ministry signed a Memorandum of Understanding (MoU) with Indian authority allowing India to use Ashuganj port to ship heavy equipment for setting up 726.6 megawatt (mw) power plant in Tripura.
“Now we find that the MoU is faulty and that it needs to be modified in future.”
Moreover, the official said, National Board of Revenue issued an statutory regulatory order in June this year on transit-transshipment charges specifying the amount of money for a container or a tonne of goods payable to Bangladesh as service charges for carrying goods through Bangladesh’s territories to Indian states. The SRO was also beyond the knowledge of foreign ministry, the foreign ministry official complained.
India reacted sharply to the SRO and it led to misunderstanding with India at a time when Bangladesh was expecting huge amount of service charge by providing transit facilities to India, Nepal and Bhutan.
The government has formed an expert committee headed by Tariff Commission chairman, which will explore possible transit routes and suggest a single structure on transit and charges studying different such facilities in neighbouring countries. Again, the foreign ministry has been left out of the process, the official said.