Bangladesh Considers Withdrawing Three Rail Projects Under Indian Line of Credit

The Bangladesh government is reportedly considering withdrawing three major rail projects, valued at over $800 million, from the Indian loan-funded portfolio due to slow disbursal of funds and prolonged implementation delays. The Economic Relations Division (ERD) is exploring alternative financing options as the delays have already led to additional funding requirements of nearly $770 million.

### Delays and Challenges

Officials have cited complexities in obtaining approvals from Indian authorities as a significant factor hindering the progress of these projects. The disbursement rate of Indian loans for the three rail projects has been alarmingly low, standing at just 1% over the past six years. These delays have escalated costs and stalled progress, prompting the government to reassess its reliance on Indian credit.

### Projects Under Review

The three projects under scrutiny include:

1. *Bogura to Sirajganj Dual Gauge Railway Line*: Initially allocated $379.29 million in Indian credit, this project began in 2018 but now requires an additional $300 million due to delays.

2. *Khulna-Darsana Rail Line*: Allocated $312.48 million, this project now needs an extra $350 million for completion.

3. *Parbatipur to Kaunia Dual Gauge Line*: With an initial allocation of $120.41 million, this project requires an additional $120 million.

These estimates are based on 2023 calculations, suggesting that current funding requirements could be even higher.

### Upcoming Review Meeting

A progress review meeting on Indian Line of Credit (LoC) projects is scheduled to take place in Dhaka, where the fate of these projects will be decided. The Indian delegation, led by Suja K Menon, Director for Credit Lines at the Ministry of External Affairs, will meet with Bangladesh’s representatives, including Mirana Mahrukh, Additional Secretary of ERD’s Asia Wing. If India does not commit to providing the additional financing required, Bangladesh may finalize its decision to withdraw these projects.

### Broader Implications

The slow execution of these projects has raised concerns about the effectiveness of Indian-funded initiatives in Bangladesh. The government has indicated that it will withdraw from projects showing no substantial progress unless they can be expedited.