Witnesses signing of $1-billion credit facility to Dhaka

Union Finance Minister Pranab Mukherjee made a brief visit to Dhaka on Saturday for talks with Bangladesh leaders on the growing cooperation between the two neighbours .

This is the first visit by a key Indian leader since Prime Minister Sheikh Hasina's visit to New Delhi in January this year . Mr. Mukharjee was received at the airport by Bangladesh Finance Minister, Abul Maal Abdul Muhith.

One of the main objectives of Mr. Mukherjee's visit was to witness the signing of $1-billion credit facility offered by India to Bangladesh . Witnessed by Pranab Mukharjee, Bangladesh finance minister and Prime Minister's economic affairs adviser Mashiur Rahman, the agreement was signed by chief of the EXIM Bank of India and Secretary of Bangladesh's Economic Relations Division (ERD) .

The amount will be utilised for implementation of 14 projects, mostly related to development of railway infrastructure in Bangladesh, upgrading of Ashuganj river port, construction of roads and bridges to facilitate trans-shipment of Indian goods to its North-Eastern region through Bangladesh, purchase of double-decker buses from India and setting up of power gridline between India and Bangladesh.

Prime Minister Manmohan Singh announced the credit facility for a range of projects including supply of locomotives and passenger coaches for railway, rehabilitation of Saidpur railway workshop and river dredging projects during Sheikh Hasina's visit to India.

The main features of the credit line agreement are: 1. Rate of interest 1.75 percent per annum (fixed).2. Commitment fee 0.5 percent per annum on unutilised credit after 12 months from the date of contract approval.3. Repayment period 20 years (including a grace period 5 years).

The main Opposition BNP earlier called on the government not to sign the agreement with India terming it “disgraceful” and claimed the interest rate “too high.”

Mr. Mukherjee, however, told journalists that the terms and condition of the loan agreement were "very favourable." He also said the line of credit for Bangladesh was the one-time single largest credit package of New Delhi for any other country.

During the four-hour trip, Pranab Mukharjee called on Sheikh Hasina at her official residence Gonobhaban. He also held talks with his counterpart Muhith and Foreign Minister Dipu Moni . They reviewed the implementation of the agreements reached between the two countries during Sheikh Hasina's visit.

Official sources said, Mr. Mukherjee also reviewed decisions taken in light of the 51-point joint communiqué issued during Sheikh Hasina's visit.

Bangladesh also raised issues like signing of Teesta water sharing agreement and boundary demarcation during talks. Although the Prime Ministers of India and Bangladesh agreed to sign the interim agreement, progress is yet to be made on that accord despite both sides had a series of meetings since January.

Transit facility

Mr. Pranab Mukharjee said, New Delhi would earmark the non-tariff barriers and remove the obstruction for Bangladeshis products' access to the his country's market.

“We will soon have in place arrangements to allow trucks from Nepal to enter the Bangladesh side of the land customs station at Banglabandha,” Mr. Mukharjee said after holding a meeting with Mr. Muhith here .

Mr. Muhith said, his country would serve as the best transit service-providing country in the South Asian region. Bangladesh, he observed, could provide transit facilities to Bhutan, India, Nepal, Myanmar and China . Bangladesh had agreed to revive the land customs stations along the Tripura Mizoram border, build a bridge over the common river Feni at Sabroom-Ramgarh point, and strengthen other border infrastructure.

During Sheikh Hasina's visit to New Delhi in January, Bangladesh agreed to allow India using the Chittagong port, while Delhi agreed on giving transit facilities to Bhutan and Nepal for increasing connectivity, trade and investment.

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