Delay in project implementation hinders more loan inflow
Rafiqul Akter: Experts have underscored the need for executing development projects within the time frame with a view to increasing higher foreign loan in the country. The slow progress of the projects is hindering the foreign aid inflow in the country, they claimed.
They also recommended the authorities concerned to undertake necessary steps for implementing development projects, especially mega projects within the deadline which would help attaining more foreign aid and ensuring economic growth of the country.
The disbursement of foreign aid stood at US$6.20 billion in the last fiscal year (FY) 2018-19 which was $6.10 billion from its previous fiscal 2017-18.
However, the development partners disbursed $3.67 billion in FY 2016-17, followed by $3.56 billion in 2015-16, $3.04 billion in 2014-15, $3.08 billion in 2013-14, $2.81 billion in 2012-13, $2.13 billion in 2011-12 and $1.80 billion in 2010-11, according to the data of Economic Relations Division (ERD).
The commitment of foreign assistance during the last fiscal stood at US$14.61 billion, the ERD data showed.
Some big credit deals including a $4.5 billion loan package agreement with India, a contract with China for $2.7 billion in loan for the Padma bridge railway link project, and a $1.83 billion package from Japan contributed to the rise in commitment of aid, said an ERD official. An ERD official told to the Daily Industry country received the highest foreign aid in the last fiscal due to implanting mega projects.
Since the commitment of the external aid is rising year-on-year, the foreign aid inflow to Bangladesh would also be increasing resulting in more investments for developing infrastructure, he said.
The external assistance disbursement could be increased, had the project implementing agencies executed their foreign-funded projects in time.
Bangladesh’s key development partners, including the World Bank, the Asian Development Bank and the JICA (Japan International Cooperation Agencies), disburse low-cost funds every year for the country’s development.
The government is mainly utilizing foreign aid to build infrastructure as well as to cut poverty across the country.
The reason for the low utilisation includes complexities in the projects rather than the neighbouring country dragging its feet in parting with the amount, said an ERD official
Japan, World Bank, and Asian Development Bank have also committed huge amount of funds in recent years.
Japan committed billions of dollars for mega such as the Dhaka Metro Rail project and the Matarbari coal-fired power plant, but their implementation came almost to a halt after seven Japanese nationals were killed in the 2016 Holey Artisan Bakery attack. The deceased Japanese nationals included experts for the metro rail project.
However, the ERD official said the implementation expedited from last fiscal year. According to the ERD’s “Flow of external resource into Bangladesh” report published last year, the sluggish implementation of project results in slow disbursement of aid, leading to time and cost overruns.
The report said projects are often designed without proper planning or feasibility studies and people engaged in project preparation are not properly trained.
Delay in approval of awarding contracts, appointing consultants, releasing funds as well as the lack of coordination among financiers in case of multi-donor funded projects were found to be the causes for the slow disbursement, according to the ERD report.