Past projects taking toll on state coffer

State bank borrowing is swelling for having to fund the development projects undertaken by the fallen regime, as the interim government is in a double bind because ditching those will amount to twofold losses.
Finance Adviser of the post-uprising government Dr Salehuddin Ahmed Monday struck such dilemma facing press queries about rising government borrowing from the banking system that economists say may create a crowding-out effect in business financing.
"We can't abandon all the projects taken by the previous government. Some projects already completed 50-60 per cent," he says.
Mr Ahmed was replying to newsmen's queries after chairing two meetings of the Advisers Council Committee on Economic Affairs and Government Purchase at Bangladesh Secretariat.
He was asked the reasons behind the rise in bank borrowing by the government-belying belt-tightening stance of the interim regime.
The adviser says though there are many questions about these projects, "we can't ditch them (to incur further loss)".
"Overall, we brand it as deadweight loss. If we close them now, the entire funds spent so far will be a total loss," says Mr Ahmed, explaining the reasons why not abandoning them.
Taking all this into consideration, he says, the interim government is implementing some of the projects taken by the previous regime. "On the other hand, we did not take so many new projects."
The finance adviser mentions that the interim government has so far repaid some US$6.0 billion worth of loans taken in the past despite economic odds.
Replying to a query, the adviser says he is satisfied with the country's overall macroeconomic situation.
"We are satisfied with the overall macroeconomic condition," he told the reporters, adding that this is not only his opinion but many people say so.
However, he acknowledges that there are some areas where the situation is "not entirely satisfactory", especially at the micro level.
"There is no country in the world where every sector runs very well simultaneously. That is simply not possible."
He says the finance ministry will allocate necessary funds for the treatment of critically injured Sharif Osman Hadi, the spokesperson for Inqilab Moncho and a prospective independent election candidate for Dhaka-8 constituency.
According to cabinet division officials, the adviser's council meeting on government purchase on the day approved a proposal to import rice and fertilisers, among others.
Under an approval the Ministry of Food will procure 50,000 tonnes of rice from India-based M/s Bagadiya Brothers Private Ltd at a total cost of Tk 2.14 billion.
Also, the meeting approved two separate proposals for the Ministry of Industries to import a total of 80,000 tonnes of fertilisers.
Under the approval proposals Saudi-based SABIC Agri-Nutrients Company will supply 40,000 tonnes of fertilisers under the 12th lot and 40,000 tonnes more under the 13th lot where each tonne will cost $413.46 and a total cost will stand at Tk 4.06 billion.
The meeting also approved a proposal to build a fertiliser buffer godown in Naogaon with a 25,000-tonne storing capacity which will cost the exchequer Tk 547 million while construction of another fertiliser buffer godown in Bogura with 20,000-tonne storing capacity costing Tk 592 million.

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