Bangladesh and India began a two-day meeting to review Indian-funded projects, which have been running behind schedule.

Officials from both countries participated in the meeting at the Economic Relations Division (ERD) yesterday, aiming to resolve complexities and expedite the long-delayed projects.

This is the first such meeting since the student-led mass uprising ousted former prime minister Sheikh Hasina on August 5 last year, forcing her to flee to the neighbouring country.

Finance Adviser Salehuddin Ahmed reiterated that projects under Indian line of credit (LoCs) would continue.

"As project implementation was delayed, many assumed we would shut those down. But that is not the case. It's not possible," he told reporters after a meeting of the advisory committee on government purchase.

He said it does not matter which government initiated these projects because they are necessary. "So, we have decided to continue them," he added.

Projects with zero to one percent progress will be reviewed, but they will not be cancelled at this stage, he added. "Cancelling a project is a very sensitive issue. We are fully aware of this, and therefore, we are not going to cancel any project."

"Apart from the economy, there is also a bilateral [relations] aspect. Our priority is the economy," the finance adviser added.

SLOW PROGRESS

Those involved in Indian-funded projects left Dhaka two or three days after the fall of the previous government in August last year in line with directives from the Indian High Commission in Dhaka, project officials said.

Although many of them have returned, the projects are yet to get momentum as several finance-related issues are still pending with the Indian authorities for approval, they said.

One of these eight projects is for laying the third and fourth railway lines on the Dhaka-Tongi route and a second line on the Tongi-Joydebpur route.

The project saw less than 2 percent progress in the past six months since August last year, according to Bangladesh Railway data.

The Bangladesh Railway undertook the project in November 2012 at an initial cost of Tk 848.60 crore although it did not conduct a feasibility study or draft detailed designs.

The project was supposed to be completed by June 2015, but physical work started in February 2019 due to complexities over the design and tendering process, poor planning and a lack of coordination among different government agencies.

As such, the project's deadline was revised to June 2027 and costs increased nearly 300 percent to Tk 3,342 crore.

Till January this year, the project has seen only 38 percent progress.

Out of six ongoing railway projects under an Indian LoC, the Khulna-Mongla Rail Line has become functional. However, although it was inaugurated in 2023, the project has not been completed.

Meanwhile, work on four other projects is expected to be delayed further, Bangladesh Railway officials said.

The four projects are: rehabilitation of the Kulaura-Shahbazpur section; conversion of the metre-gauge into a dual-gauge line from Parbatipur to the Kaunia section; construction of double line in the Khulna-Darshana section; and construction of dual-gauge line from Bogura to Sirajganj.

A railway official present at yesterday's meeting said the Indian authorities were asked to take a decision regarding the last three projects soon or devise a plan for a safe exit from these projects.

Bangladesh has already sent a letter seeking comment from Indian authorities within a month about funding these three projects, the official said, preferring anonymity.

Only $80.14 million was disbursed in loans in the first seven months of the current fiscal year compared to $311 million in the same period of the preceding year.

Officials said the disbursement was lower this time due to unrest since the start of the current fiscal year, which caused many Indian contractors to flee the country, delaying the work further.

India is supposed to provide over $7.36 billion in loans under three lines of credit (LoCs), with the first LoC signed in August 2010.

But only $1.88 billion has been disbursed so far, documents show.

The first LoC, worth $862 million for 15 projects, was signed in 2010 while a second worth $2 billion for 12 projects was signed in March 2016.

A third credit deal was signed in October 2017 for $4.5 billion for 15 projects.

Overall, there are 42 projects under the three LoCs.

Of them, 14 have been completed at a cost of around $410 million, or around 6 percent of the overall commitment under the first two credit deals.

According to the terms of the deal, all project-related materials must be procured from India and all contractors and consultants must be hired from India.