Gautam Debroy
New Delhi: The ministry of external affairs (MEA) has admitted that several Indian projects in Bangladesh face uncertainty due to the current political situation. The ministry further said that several Indian project personnel facing threats and security and safety concerns have also returned back to the country.
The submission made by the MEA before a Parliamentary Standing Committee on External Affairs comes at a time when the India-Bangladesh relation has been going through rough patches after the Sheikh Hasina led Awami League government was dethroned following deadly anti-government protests in Bangladesh.
It is worth mentioning that development cooperation is a key instrument in India’s foreign policy. The scope and reach of India’s development cooperation has seen considerable expansion in the past few years which includes grant assistance, Lines of Credit (LoC), technical consultancy, disaster relief, humanitarian aid, educational scholarships and a range of capacity-building programmes including short-term civilian and military training courses which have been growing consistently encompassing the geographical reach and sectoral coverage.
Under ‘Aid to Bangladesh’, the government of India had allocated Rs 200 crore during Budget Estimate 2023-24, which was reduced to Rs 130.00 crore in Revised Estimate in 2023-24. Now, in the allocation for Budget Estimate 2024-25, it has been further reduced to Rs 120 crore.
“The political unrest during the months of July-August 2024, and the resulting law and order deterioration, resulted in several Indian project personnel facing threats and security and safety concerns due to which they had to evacuate to India under emergency conditions. Since then, work has gradually resumed on some sites and is expected to return to normal pace of execution for some critical projects in the short term. However, given the changed political situation, it is expected that the spending under ‘Aid to Bangladesh’ may continue to see a downward trend,” the Ministry stated.
The ministry, however, in its reply to the Parliamentary committee said that in view of the current political and security situation in Bangladesh, it is foreseen that depending on the security situation, projects will be initiated.
Indian Projects In Bangladesh
The ministry of external affairs has said that some large infrastructure projects being undertaken under India’s grant assistance have been completed such as India Bangladesh Friendship Pipeline (IBFPL), Supply of 20 BG locos to Bangladesh” in the last financial year.
“In view of the current political and security situation in Bangladesh, it is foreseen that depending on the security situation, projects will be initiated and funds are requested for continuation of ongoing projects like dredging of Ashuganj-Zakiganj and Sirajganaj-Daikhowa stretch and High Impact Community Development Projects (HICDPs), which are people-centric projects. Hence, the demand for funds has been adjusted suitably,” the ministry said.
Reduction of expenditure in Akhaura-Agartala Rail Link Project, is due to delay in approval of variation by Bangladesh Railways (BR) and payment to the contractor could not be made in 2023-24. Further funds demand in BE 2024-25 for the project has been reduced due to variations in contract amount from Rs 185 crore to Rs 165 crore (variation under approval with Bangladesh Railways).
Close Watch Over Evolving Situation
The Ministry has stated that they are currently having a close watch at the evolving situation. Depending upon the circumstances, decisions for the new projects will be taken.
“At the moment, HICDP project like development of Primary Health Care Center and Anath Ashram for Shri Harigurugopal Chand Ashrambari at Shridham Lokkhikhali Morelganj in Bagerhat at a total cost of Rs 7.62 crore are currently at MoU signing stage.
Foreign Secretary Vikram Misri said that with Bangladesh, development partnership is a major priority.
He said that India has extended concessional financing in the form of loans and grants amounting to approximately 10 billion dollars making it India’s largest development partner. Key ongoing projects include cross-border rail links, river dredging works, and several high impact community development projects, some large infrastructure projects that have been undertaken under our grant assistance include the Friendship Pipeline and the supply of rail locomotives to Bangladesh which were completed in the last financial year.
“We are all looking at the recent developments, the political upheaval that has taken place in Bangladesh. This did impact the security situation in the country and as a result impacted the execution of our projects. We are carefully observing the situation and taking the steps to resume work on these projects as soon as possible,” Misri said.
Akhaura-Agartala Rail Link Project
The current political situation in Bangladesh has severely affected the much awaited Akhaura-Agartala Rail Link Project with hardly 1 percent of minor works pending.
“The Akhaura-Agartala rail line project is substantially completed, with less than 1% of minor works pending. The track trials were completed by October 2023, and thereafter the completion of track works was marked with an inauguration ceremony on November 1, 2023 at the VVIP level. The project is expected to be fully completed with all corrective works etc., and handed over to Bangladesh Railway by October 31, 2024,” the ministry said.
The Ministry said that Bangladesh Railway is also in the process of revising the Development Project Proposal (DPP) of the project for extension of time and defect liability till June 30, 2025, and to process variation requests of the contractor for non-scheduled items.
Status Of Ongoing Projects
The Ministry has said that several projects which were about to finish are still facing issues due to the current political situation. “Government of India has undertaken several developmental projects under its various financing instruments, such as LOC, Concessional Financing Scheme, and Grants,” the ministry said.
Under concessional loans 14 projects have been completed, 2 projects are in defect liability period, 8 projects are in physical execution stage, for 1 project the contractor has been identified and is about to start execution, 7 projects are at consulting stage with detailed design and tender documents under preparation and 9 projects are in project preparation stage.
Experts Opinion
Talking over the present situation in Bangladesh and its possible impact on India’s projects, Gautam Lahiri, an expert on India’s foreign policy also admitted that the ‘Line of Credit’ projects in Bangladesh after the upheaval have been stalled mainly because of security reason and most of the staff who were working there, fled away from Bangladesh.
“All the important projects including connectivity between India and Bangladesh, which is also a part of the Asia Railway Network, Agartala-Akhowra railway project is practically stalled. And we have seen in the present budget 2025-26, the finance minister sanctioned funds for the implementation of the India supported projects. Bhutan got the highest amount, more than Rs 6,000 crore. However, as far as Bangladesh is concerned, the government has agreed to continue with the Rs 120 crore which was given in 2023-24,” said Lahiri to ETV Bharat.
He further said, “We hope in the coming times, the projects will start getting implemented as India is trying to reach out to the Mohd Younus government with the visit of India’s foreign secretary to Bangladesh.”
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