Govt reminds Delhi of its query over procurement complexities
Tuesday, 17 May 2011
FHM Humayun Kabir
The government has reminded India last week of its bid to seek quick clarification on the procurement complexities, stagnant for many weeks, concerning the 20 projects under the latters' one billion US dollar-credit, officials said Monday. "As more than one month has elapsed since sending the project details for getting clarification on the complexities that have emerged, we need quick feedback," a senior Economic Relations Division (ERD) official told the FE. He said: "Our implementing agencies are waiting for the lender's clarification about the complexities that have arisen on the procurement issue." The ERD had sent 20 project details under the one billion-dollar loan to Delhi more than a month ago, but the lender is yet to provide any clarification. The complexities have emerged when some government agencies face difficulties in complying with the provision of cent per cent procurement of goods, works and services from India under the $1.0 billion funded projects. As per the loan contract, Bangladesh will have to procure all goods, works and services from India for the schemes. Only 15 per cent goods, works or services can be procured from Bangladesh if the contractor fails to source it from India. The Indian government in August last year has confirmed $1.0 billion loan for Bangladesh to develop infrastructure, especially improve the transport sector to facilitate cross-border communications between the two neighbours. The Bangladesh government has undertaken 20 projects for upgrading its rickety railway, road, river and port facilities borrowing the fund from the Indian government. Indian state-owned EXIM Bank has been entitled to provide the loan at a rate of 1.75 per cent with 24 years' repayment period, where 0.5 per cent commitment fees will be applicable per annum on unutilised credit after 12 months from the date of the contract. Another ERD official said, "The implementing agencies have been seeking clarification from us by sending repeated letters but we are not being able to give them any positive feedback due to the absence of India's clarification on the 'dispute'. He said: "The Indian government's separate agencies have been reviewing the projects in detail, which were sent by Bangladesh." He said the project implementers have fallen into problems, especially in procurement of works as Bangladesh needs to purchase at least 85 per cent of goods, works ands services from India for the projects under the billion-dollar loan. Due to the barriers, ERD and Bangladesh's project implementers sat with the lender EXIM bank in Dhaka in November 2010, where the bank urged the government to send project details for getting clarifications on the unsettled 'disputes', he said. A Roads and Highways Department official said: "If we procure stone, cement, sand, bricks and all the works and services from India, the road construction cost will be almost double." The official said: "The Indian government wants to supervise some projects through their consultants. But in our projects, there is no provision of appointing consultants. It has created another complexity." A top planning ministry official said: "I don't know what will be the fate of the Indian credit programme. Eight months have already passed, but the project works have not started due to the procurement snags." If government agencies fail to begin work within 12 months from the date of the aid deal, they will have to pay 0.5 per cent additional charges as commitment fees to India, he said. Under the $1.0 billion credit line, the government has undertaken 12 projects for railway development, five for transport sector improvement and three for port development and other works.
The government has reminded India last week of its bid to seek quick clarification on the procurement complexities, stagnant for many weeks, concerning the 20 projects under the latters' one billion US dollar-credit, officials said Monday. "As more than one month has elapsed since sending the project details for getting clarification on the complexities that have emerged, we need quick feedback," a senior Economic Relations Division (ERD) official told the FE. He said: "Our implementing agencies are waiting for the lender's clarification about the complexities that have arisen on the procurement issue." The ERD had sent 20 project details under the one billion-dollar loan to Delhi more than a month ago, but the lender is yet to provide any clarification. The complexities have emerged when some government agencies face difficulties in complying with the provision of cent per cent procurement of goods, works and services from India under the $1.0 billion funded projects. As per the loan contract, Bangladesh will have to procure all goods, works and services from India for the schemes. Only 15 per cent goods, works or services can be procured from Bangladesh if the contractor fails to source it from India. The Indian government in August last year has confirmed $1.0 billion loan for Bangladesh to develop infrastructure, especially improve the transport sector to facilitate cross-border communications between the two neighbours. The Bangladesh government has undertaken 20 projects for upgrading its rickety railway, road, river and port facilities borrowing the fund from the Indian government. Indian state-owned EXIM Bank has been entitled to provide the loan at a rate of 1.75 per cent with 24 years' repayment period, where 0.5 per cent commitment fees will be applicable per annum on unutilised credit after 12 months from the date of the contract. Another ERD official said, "The implementing agencies have been seeking clarification from us by sending repeated letters but we are not being able to give them any positive feedback due to the absence of India's clarification on the 'dispute'. He said: "The Indian government's separate agencies have been reviewing the projects in detail, which were sent by Bangladesh." He said the project implementers have fallen into problems, especially in procurement of works as Bangladesh needs to purchase at least 85 per cent of goods, works ands services from India for the projects under the billion-dollar loan. Due to the barriers, ERD and Bangladesh's project implementers sat with the lender EXIM bank in Dhaka in November 2010, where the bank urged the government to send project details for getting clarifications on the unsettled 'disputes', he said. A Roads and Highways Department official said: "If we procure stone, cement, sand, bricks and all the works and services from India, the road construction cost will be almost double." The official said: "The Indian government wants to supervise some projects through their consultants. But in our projects, there is no provision of appointing consultants. It has created another complexity." A top planning ministry official said: "I don't know what will be the fate of the Indian credit programme. Eight months have already passed, but the project works have not started due to the procurement snags." If government agencies fail to begin work within 12 months from the date of the aid deal, they will have to pay 0.5 per cent additional charges as commitment fees to India, he said. Under the $1.0 billion credit line, the government has undertaken 12 projects for railway development, five for transport sector improvement and three for port development and other works.