India is all set to deliver as it wants to hand over the first lot of 20 coaches by this month, according to sources in the Bangladesh Railway (BR).
On January 21 last year, the BR signed an agreement with RITES Ltd., a Government of India enterprise, to purchase 120 BG coaches under the project “Procurement of 120 BG coaches” under the first Indian LoC.
The RITES Ltd. submitted a delivery schedule under which 120 coaches will be delivered in six equal lots to Bangladesh, starting from January 2016 and the sixth lot will be delivered in July 2016.
The BR allocated Tk. 563.52 crore in the Annual Development Programme in line with that delivery schedule.
However, The RITES Ltd. recently has sent another schedule where it mentioned that the tentative de-livery of coaches would be in February, March, May, July, September and November of the current year. The company wanted to deliver 20 coaches in each lot.
The Indian company has said according to the new delivery schedule, it would supply only 60 carriages in the current financial year and the rest 60 coaches in the next fiscal year.
The BR said it would have a negative impact on the utilisation of the already allocated funds. It also said that Tk. 324.49 crore would remain unspent in the current fiscal year.
Bangladesh has already completed seven projects out of the 15 under the first Indian LoC during the last five years.
India extended USD 1billion credit line to Bangladesh for developing infrastructure projects, mostly in the communication sector. A loan agreement between the EXIM Bank of India and the Economic Rela-tions Division (ERD) of the finance ministry was inked in August 2010. India also converted USD 200 million out of the USD 1 billion LoC as grants in June 2012, enabling Bangladesh to utilise it for any priority project.
This has been the single largest credit line offered by India to any country. The agreement provided credit at 1.75 per cent interest rate with a repayment period of 20 years, including a grace period of five years.
The rate of interest was later revised to 1 per cent in May 2012.