The authorities concerned have sought relaxation of the conditions attached to procurement of goods and services for the projects being implemented under two Indian lines of credit (LoCs) worth US$ 6.5 billion.
The implementing agencies of the projects have been facing difficulties in completing necessary purchases due to the limited bidding system and inflexible terms of the Indian loans, officials said Tuesday. The difficulties also have caused delays in implementation of the projects.
They said the project authorities requested relaxing the conditions of the second and third Indian credit at a meeting between economic relations divisions (ERD) of Bangladesh and the representatives of the Indian government in Dhaka on Monday.
An ERD official said they had decided to sit with the secretaries and high officials of the implementing agencies of 31 projects under the LoCs in the first half of June. They would also invite economic advisor to the Prime Minister Dr Mashiur Rahman at the meeting.
"The proposed meeting with the secretaries is expected to be held before going to New Delhi in the middle of next month to hold negotiation. We will sit for the negotiations on the third Indian LoC worth $4.5 billion," said the ERD official.
He said the meeting in mid-June would just be a homework for being able to negotiate the loan in a perfect manner.
 According to the terms and condition of the $862 million LoC-I, Bangladesh has to procure at least 75 per cent of the goods, services and works from India.
Under the second LoC, Dhaka will have to procure at least 75 per cent of the goods, services or works from India. But in some cases like for civil works, Dhaka could purchase only 65 per cent from Indian market while the rest 35 from Bangladesh market.
The ministries and agencies have already taken 14 projects under the $2.0 billion second LoC. Besides, different agencies have planned to take up 17 more projects under the fresh $4.5 billion third LoC.
A health ministry official, who attended the tripartite meeting, said they wanted to procure some international standard equipment and machinery for the hospitals, which were not of Indian origin.
"So we need to go to European or American markets. But if New Delhi does not relax its lending conditions, we will not be able to go for procuring those world-class equipment," he added.
A road transport and bridges ministry official said they had sought relaxation of the loan conditions as it would not be viable to procure bricks, sands, rods, cement or some other construction materials from Indian market. "So the procurement terms should be relaxed."
Earlier in August 2010, India had offered Bangladesh the first LoC worth $862 million under which it took 15 projects. Out of the 15, eight projects have already been completed and the remaining seven are in progress.
Bangladesh and India signed the $2 billion LoC deal in March 2016 and both the neighbours have recently signed another Memorandum of Understanding (MoU) for $4.5 billion third LoC in April this year.
The Bangladesh government has undertaken projects in transport, power, health and education sectors under the support of second and third LoCs.
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Source: The Financial Express