The 14 projects to be executed under the loan are on top of the list of India for opening its transit route through Bangladesh to the northeast- critics wondered why it has taken the decision to finance basically Indian projects with a huge loan.
The billion dollar Indian credit line agreement has come up for critical scrutiny apparently on the merit of the projects as to how much they are having national priority to be implemented by taking a commercial loan.
The 14 projects to be executed under the loan are on top of the list of India for opening its transit route through Bangladesh to the northeast.
The Awami League-led government has taken the political decision to this effect but critics wondered why it has taken the decision to finance basically Indian projects with a huge loan.
The projects in the list are aimed at developing supportive infrastructures to create necessary conditions to create transit through Bangladesh.
BIDS research director Dr KAS Murshed in a recent work on India-Bangladesh-Northeast: Transit and Strategic Configuration ruled out the claim that Bangladesh will anyway benefit from the opening of transit.
Many people here toeing the government policy line tend to say that Bangladesh would fetch up to US$ 3.0 from transit related activities annually.
The Indian team visiting Ashuganj after the signing of the loan agreement to see the riverine spot to develop the port of call there made similar claim. But all such claims are misleading and having no basis of any cost-benefit calculation, knowledgeable sources said.
Even the World Bank and such other organisations promoting the transit corridor is yet to carry out such cost-benefit estimate and people wonder why they are not doing it. Murshed, however opined that railway may have some relevance to transit but the revenue prospect from railway transit will also remain limited up to US$ 30 million. But the country may stand to lose market in the northeast from such opening to direct Indian traffic, he maintained.
People wonder if the country is really buying troubles with the credit line and moreover how will it repay the money without viable revenue income from the facilities.
Akbar Ali Khan, a former secretary and adviser of the caretaker government wondered whether the projects to be funded under the loan are really essential for Bangladesh.
He told the press that taking such loans is not something new, but the nation must have critical assessment on the merits and demerits of such loans to be used for funding projects.
He said India always remained a critical factor to Bangladesh politics. So before doing anything the country should have its own critical exercise.
He said the serious question is not the rate of interest at 1.75 percent per annum with 0.50 commitment fees on unutilized credit after 12 months or the 20 repayment period is enough or not.
It is reported that under the agreement, Bangladesh has the obligation to buy 80 percent of the merchandise from Indian suppliers, in addition to sourcing hundred percent consultancy services.
It means the tied loan will make sure the recycling of the money to the Indian economy, except making some payment to local labours.
The higher commitment fees for the loan is moreover, focused on making sure that the entire loan should be used in time to avoid penalty and to achieving total Indian strategic goals without failing.
This is why the Prime Minister is reported to be partly unhappy with the terms of the loan, news reports said.
BNP and the major opposition termed the loan as quite ‘disgraceful’ and landed sharp criticism against it. But Finance Minister AMA Muhith said it would help create condition to making Bangladesh a ‘best servicing transit nation’ in the region.
"The New Nation: August 10.2010"