Korea may withdraw soft loan
FE Report | Wednesday, 20 August 2008
The Korean government may withdraw a soft loan protesting the alleged procrastination of Bangladesh Road Transport Corporation (BRTC) and other government agencies to procure dedicated CNG buses from Korea.
"Recently, the Korean government in a letter to the Economic Relations Division (ERD) strongly complained about the delay to sign the minutes of discussion (MOD) by the Bangladesh government agency concerned and said if no positive action is taken soon, the Seoul may withdraw the soft loan," a source said.
In response to Bangladesh Government request to procure 300 units of dedicated CNG buses from Korea under K-EDCF (Economic development cooperation fund of Korea) fund in the year 2005, the Korean Government positively responded to the Government request and dispatched an appraisal team in 2007.
"Upon subsequent discussion, Korean Government is now ready to sign the MOD but surprisingly BRTC and other relevant Government agencies are dilly dallying to sign the document," the source said.
It may be mentioned here that the K-EDCF is a Government to Government soft loan wherein the interest rate is only 0.5 per cent per annum and repayable in 30 years with 10 years grace period.
The only harsh condition of this soft loan is that only Korean bidders can participate in the tender and the goods have to be of Korean origin.
The BRTC sources said they needed to increase the size of their buses so that more passengers could be carried in Dhaka and even some other cities. An estimated number of 3,000 buses currently ply the capital's streets.
The government's delay in procurement of at least 200 CNG-powered buses has prolonged the sufferings of commuters and also the traffic congestion on Dhaka streets reigned over by small vehicles.
"Recently, the Korean government in a letter to the Economic Relations Division (ERD) strongly complained about the delay to sign the minutes of discussion (MOD) by the Bangladesh government agency concerned and said if no positive action is taken soon, the Seoul may withdraw the soft loan," a source said.
In response to Bangladesh Government request to procure 300 units of dedicated CNG buses from Korea under K-EDCF (Economic development cooperation fund of Korea) fund in the year 2005, the Korean Government positively responded to the Government request and dispatched an appraisal team in 2007.
"Upon subsequent discussion, Korean Government is now ready to sign the MOD but surprisingly BRTC and other relevant Government agencies are dilly dallying to sign the document," the source said.
It may be mentioned here that the K-EDCF is a Government to Government soft loan wherein the interest rate is only 0.5 per cent per annum and repayable in 30 years with 10 years grace period.
The only harsh condition of this soft loan is that only Korean bidders can participate in the tender and the goods have to be of Korean origin.
The BRTC sources said they needed to increase the size of their buses so that more passengers could be carried in Dhaka and even some other cities. An estimated number of 3,000 buses currently ply the capital's streets.
The government's delay in procurement of at least 200 CNG-powered buses has prolonged the sufferings of commuters and also the traffic congestion on Dhaka streets reigned over by small vehicles.