Has India really cheated Bangladesh?

Hassan Ibn Hamid

A different journey of the India-Bangladesh relationship has started with Sheikh Hasina’s historic victory in the national elections of Bangladesh on December 29, 2008. 

In the last 10 years, this relationship has turned into a development partnership and India has become a development partner of Bangladesh after signing the LOC agreement in 2010. 

So far, three Lines of Credit or LOC agreements worth USD 800 crore have been signed between India and Bangladesh. But recently many are terming these LOCs as a hoax. Under these LOCs, India is extending a hand of cooperation for various development projects in Bangladesh including road-rail-water-air connectivity, power and energy etc. Then why are these questions being raised! Why are these people spreading such propaganda about LOC?

This article is not for those are deliberately spreading this propaganda, but for the ones who are being misguided by it. Without a clear idea the common people can easily get confused by such statements. So far, three LOCs have been signed between Bangladesh and India. Under the first LoC signed in 2010, India extended a loan facility of $1 billion for infrastructural development projects in Bangladesh. 

Then in 2015, India signed the second LOC worth $2 billion and in 2017, a third LOC agreement worth $4.5 billion was signed. Now the question arises, how much work has been completed so far under these LOCs. 

Many people want to say with a few examples that India did not keep its promise even after 10 years of signing the loan agreement. Once we look at the implementation process, it will become clear to us whether India has really cheated us or not!

With the remaining $860 million, the first loan agreement was signed for the procurement of goods, construction of railway infrastructure, dredging of rivers, construction of bridges, purchase of buses, railway engines and bogies, and renovation of the Syedpur railway workshop. 

Of the 15 projects under the agreement, 12 have been completed and 600 million has been disbursed so far. $260 million has not been spent yet. Many people are talking about the non-completion of these three projects of the first LOC, but they are not aware of why the work has not been completed or how far the work has progressed. In particular, the complexity of the construction of the railway line from Khulna to Mongla Port under the first LOC needs to be mentioned here.

Despite signing a deal with the contractor in 2016, the project could not be initiated due to problem on land acquisition. It is natural for the lending country not to disburse the money in advance. This means that the borrower has more weaknesses than the lending country. 

Apart from that, Additional Secretary of the Economic Relations Department (Asia) Zahidul Haque also mentioned a special reason behind the delay in starting the other two projects. In an interview with a private media outlet, he cited changes in designs as a reason for this delay. The design of infrastructural projects has been changed several times which requires the consent of stakeholders. Due to this, it was not possible to start construction work on time.

Now let's talk about the reasons behind the slow pace in the implementation of these projects. It is to mention that most of the projects under the first three LOCs were infrastructural. Many of us do not know that there are a number of steps required to implement infrastructure projects. 

First, the consultants of the projects must be hired after getting India’s consent. Before inviting tenders for the appointment of consultants, consent has to be obtained from India on the tender documents. 

India's consent has to be obtained before signing deal with the consulting firm. After that, the tender documents for the physical work have to be prepared and sent to the Ministry of External Affairs of India and EXIM Bank through the High Commission to get the consent again. 

In this case, India’s consent is required every time tender documents are amended. Even before finalising the bidding organisation, the related documents have to be sent to EXIM Bank. Thus, each approval takes two to four years. Several projects under the first LOC have slowed down as the first LOC was signed before the projects were finalised. So it took time to finalise the projects and relax the terms of purchase from India.

Therefore, those who are claiming that ‘India has cheated Bangladesh’ must have knowledge about complexities of infrastructural development projects first. It is important to know that if the land acquisition is not done or project design is not right, the promised money will never come in advance. It would be a fantasy to expect the project implemented within a year of the loan agreement. 

Therefore, we all should make comments after knowing the facts about LoC. We hope that these types of statements creating confusion in the cooperative relations between the two countries will not appear in responsible media outlets. Remember, the relationship between ‘Ganabhaban’ and ‘Janpath Road’ is historical, everlasting and eternal.

The writer is a political analyst.