28 foreign-aided projects see slow implementation

The implementation of at least half a dozen foreign-aided projects involving more than Tk 6,000 crore has become uncertain as those were included in the current fiscal year's Annual Development Programme without loan confirmation.

The Economic Relations Division (ERD) has found that many foreign-funded projects of several ministries -- especially railways and power -- could not spend their allocated funds mainly because loan agreements were not signed with the development partners.

The other reasons behind the non-utilisation of foreign aid include disputes over bidding, and delay in appointing project consultants and in removing high-voltage power lines in project areas, said an ERD report prepared early this month.

The ERD told the ministries and divisions concerned that if a loan agreement is not signed in any project in a specific fiscal year, no foreign aid will be allocated for the project in that year.

In November, the ERD reviewed progress in the implementation of 63 ongoing foreign-funded projects -- each having aid allocation of Tk 200 crore or more. They involve a total of Tk 45,442 crore.

It found that progress in the implementation of 28 of the projects was unsatisfactory.

One such project is Padma Rail Link for which Tk 4,950 crore in foreign aid was allocated in the current fiscal year. 

Financed by China Exim Bank, the project is expected to be completed by 2022 at a cost of Tk 34,988 crore. The rail link will connect Dhaka with the country's southern region via the Padma Bridge.

The government plans to open part of the rail link during the inauguration of the Padma Bridge scheduled for late next year.

Seeking anonymity, an official of the railways ministry told this correspondent that primary work in the project had been done. But they could not start the main work as the ministry is yet to sign a loan agreement with China Exim Bank.

On Wednesday, the ERD and the railways ministry held a pre-negotiation meeting with the Chinese bank. They now hope to sign the deal by mid-January, which was scheduled to be struck by this month, said the official.

Even if the deal is signed by the next month, it would take at least a couple of months to complete the complex procedures for loan disbursement, mentioned the official.

Besides, utilisation of foreign funds for several other projects has become uncertain as the ministries concerned have not yet signed loan agreements with the development partners.

The projects include Expansion and Strengthening of Power System Network under Dhaka Power Distribution Company, Power Grid Network Strengthening Project under Power Grid Company of Bangladesh, and setting up of TV stations in five divisional headquarters.

Of the 28 sluggish projects, 13 got allocations of Tk 6,736 crore in foreign aid. But the ministries and divisions concerned may not be able to use even Tk 3,000 crore in the projects in the current fiscal year, the ERD pointed out.

The government has set an ambitious target of utilising foreign aid of Tk 57,000 crore or $7.12 billion this fiscal year.

Though the government is yet to cross the $4 billion mark in terms of utilisation of foreign aid in a fiscal year, it now believes that its efficiency in utilising foreign aid has increased sufficiently over the last several years.

In the last fiscal year, the country saw the highest utilisation of foreign funds -- $3.56 billion -- in development projects.

In the first five months of this fiscal year, the government utilised foreign funds of $1.73 billion, almost double the amount ($903.18 million) in the same period in fiscal 2016-17.

Seeking anonymity, a finance ministry official said that in this fiscal year, the government utilised foreign funds much better than the previous year. But it would still not be possible for the government to reach the target.

ERD Secretary Kazi Shofiqul Azam said there are problems in some projects. But many other projects saw better utilisation of foreign aid this year.

According to ERD sources, work of the Rooppur power plant project, which got an allocation of Tk 10,186 crore this fiscal year, is going on as per schedule. Of the funds, around Tk 8,000 crore will come from Russia, and almost the entire amount will be spent this fiscal year.

In reply to a query, Shofiqul said they would again review the progress in the implementation of the projects after three months.