Agreement on third Indian LoC tomorrow

Bangladesh and India are set to sign the final agreement on third Indian Line of Credit (LoC) during the maiden visit of Indian Finance Minister Arun Jaitley, beginning today(Tuesday) in an invitation of Bangladesh Finance Minister AMA Muhith.
The agreement will be signed on tomorrow (October 4).
Finance Minister AMA Muhith has invited the Indian finance minister to discuss quick implementation of the $4.5 billion loan for development projects and $ 500 million for defence procurement.
Two Ministers are expected to review the status of economic cooperation and development partnership during the 3-day official visit of Arun Jaitley  to take forward the economic relations between the two countries.
 "The draft of the agreement is ready and sent to the finance ministry for approval,".Additional secretary of ERD Shahidul Islam had earlier said.
He said both sides will give emphasise on transparency and integrity for loan implementation than the conditions due to ensure quality of work and expedite the implementation.
He said India agreed to relax the conditions to avoid the bottleneck of implementation work for the third LoC.
According to sources, 17 projects were incorporated under the third LoC and some more will be included later.
The projects that have been primarily selected are: Infrastructure development for Power Evacuation Facilities of Rooppur Nuclear Power plant (USD 940 million); Payra port multipurpose terminal (USD 350 million); the Buriganga River (new Dhaleswari-Pungli-Bangshi-Turag-Buriganga River system) restoration project (USD 196.18 million); construction of a new dual-gauge rail line from Bogra to Shahed M Monsur Ali Station in Sirajganj (USD 501.23 million); upgradation of Saidpur airport; four lanes for
Benapole-Jessore-Narail Bhatipara-Bhanga road (135 km); Bay container terminal (Chittagong); development of rail and road based ICD at Ishurdi; transmission network development in the new alignment of NE-Bangladesh-NER( Katrihar-Parbatipur-Bornagar (765 KV inter-connection); upgradation of Mongla Port; Chittagong Dry Dock
limited; four lanes for Ramgarh to Baruerhat road (35 KM); four lanes of Comilla-Brahmanbaria-Sarail road (USD 75 million); establishment of special economic zone (Indian SEZ) at Mirersorai; Mollahat 100 MW solar PV power plant; supply of machinery for solid waste management in Dhaka South City Corporation; and installation of
one lakh LED street lights in Dhaka, Chittagong and Rajshahi by Energy
Efficiency Service Limited (EESL., ERD sources said that 65 per cent of procurement for the projects will have to be made from India. This component was 75 per cent in case of the second LoC and 85 per cent for the first LoC.
Under the Indian proposal, the interest rate will be one per cent with a five-year grace period and a 0.5 per cent commitment fee.
Sources said, as per the Indian proposal, a maximum of 65 per cent of procurement for the projects will have to be made from India.
ERD additional secretary said the Exim Bank of India has obtained all necessary approval from different government organisations to open its representative office in Dhaka.
The bank's assistant general manger, Ashish Kumar Soni, has been designated its resident representative in Dhaka. Soni has already received a Bangladesh business visa.
The Indian side mentioned that that country's Exim Bank was in readiness to open its representative office in Dhaka.
However, Exim Bank is constrained by the local employment condition (5:1 ratio) prescribed by Board of Investment, it said. On June 13, Exim Bank's chairman and managing director (CMD) Yaduvendra Mathur had requested the senior secretary of the ERD for his assistance to resolve the matter.
According to an ERD official, as the Exim Bank is a development partner and not a commercial entity, it has requested the Bangladesh government to consider Exim Bank's request and facilitate the early opening of Exim Bank's representative office, which would serve as an important link between all stakeholders and ensure that the projects
under the lines of credit (LoCs) to the Bangladesh government are implemented.
ERD sources said that the memorandum of understanding (MoU) signed between India and Bangladesh for the third LoC did not mention any conditions.
He said the conditions and terms of utilisation of the third Indian LoC will be included in the agreement to be signed between India and Bangladesh.
Earlier, the Indian side had proposed to retain all terms and conditions as before. But Bangladesh urged India to reduce the procurement condition to implement the projects as soon as possible.
The officials said the procurement-related projects would not face any problems. Even civil construction, railway, and road projects would not face difficulties either as the terms and conditions were going to be relaxed.
During Prime Minister Sheikh Hasina's recent visit to India, India committed to give Bangladesh $5 billion LoC and a primary agreement was signed in that regard.