Bangladesh reaps little benefit from Chinese credits as it plays catch-up with timeline

Bangladesh has only marginally benefitted from the $20 billion credit that China promised to provide for the infrastructural development during the visit of Chinese President Xi Jinping three years ago.

The Asian giant has released only 5 percent of the promised funds in three years although the projects slated to be financed by the credit have a deadline of four years.

The loan agreement between the two countries was signed in 2016 with an aim to complete 27 development projects in Bangladesh by 2020.

Funding for only six projects have been finalised until October, according to the Economic Relations Department, or ERD, with China shelling out $1.06 billion for these projects.

The government decided to move the 'Developing Dhaka-Sylhet Highway into Four Lane' project under the ADB’s funding, leaving 20 projects to wait for final loan agreements.

The Executive Committee of the National Economic Council or ECNEC approved five projects in anticipation of quick access to funds but now these projects are in limbo due to a fund crunch.

A Joint Working Group or JWG comprised of officials from both countries held a meeting on Monday to redress the issue of sluggish release of funds for the projects.

But ERD Joint Secretary Shahriar Kader Siddique refused to share the agenda of the meeting.

"Bangladesh will propose to speed up the projects awaiting final agreement and fund release at the meeting of the joint working group with China,” said an ERD official who declined to be named as he was not authorised to brief the media.

Simplifying the land acquisition process and providing an investment-friendly environment for Chinese businesses, and ensuring security for Chinese citizens will be discussed in the meeting, he said.

China has so far paid out more than $ 1.06 billion to Bangladesh, of which $533.5 million went towards the Padma Bridge Railway Project.

Another RMB 972.5 million was used to bankroll the Info-Sarker Project Phase (III), RMB 1.73 billion RMB for the tunnel construction project on the Karnaphuli River, RMB 569.6 million for setting up a fuel oil pipeline and mooring project from Maheshkhali to Chattogram, and RMB 224.9 million for the modernisation of the telecommunication network for a digital connectivity project.

However, the fund for the expansion and strengthening of power systems network under DPDC, which was finalised on Apr 7 this year, has yet to be disbursed.

China was also expected to provide funds worth $ 142.5 billion for constructing two fast-track railway projects, including a dual-guage track from Joydevpur to Ishwardi, approved by ECNEC on Nov 5 last year. 

And the ECNEC approved a $161 billion project entailing the conversion of Akhaura-Sylhet rail track from metre to dual gauge using prospective Chinese investment to cover the cost.

The Asian powerhouse was also expected to fund other projects, including $276.2 million for the Rajshahi Wasa Water Treatment Plant and over $970 million for the Power Grid Network Strengthening project under the PGCB and $125.1 million.

Asked about the two railway projects, Additional Director General of Bangladesh Additional Director General Mohammad Khandaker Shahidul Islam told bdnews24.com, "We wrote to the Chinese authorities, but to no avail."