Bangladesh will receive a billion-dollar soft loan from India through a deal seen as a new era in the relations between the two neighbours.

The $1 billion loan, the biggest ever credit package by India to any nation, will finance 14 development projects of Bangladesh — particularly for infrastructure building.

The line of credit is also the single largest loan to Bangladesh from any nation, development bank or donor agency.

Dhaka and New Delhi yesterday signed the loan agreement in presence of Indian Finance Minister Pranab Mukherjee and Bangladesh Finance Minister AMA Muhith.

Food Minister Muhammad Abdur Razzaque and the Prime Minister's Economic Affairs Adviser Mashiur Rahman were also present on

FROM PAGE 1 the occasion.

Secretary of Economic Relations Department M Musharraf Hossain Bhuiyan of Bangladesh and Chairman and Managing Director of Exim Bank, India TCA Ranganathan signed the deal on behalf of their sides.

Pranab said New Delhi is committed to implementing a joint communique signed during Prime Minister Sheikh Hasina's visit to India in January.

During Hasina's trip, India has agreed to give Bangladesh transit facility to connect with Nepal and Bhutan, he said.

"We will soon have in place arrangements to allow trucks from Nepal to enter the Bangladesh side of the land custom station at Banglabandha," Pranab said.

Pranab arrived in Dhaka around 3:40pm yesterday by a special Indian aircraft. Muhith received him on the WIP tarmac of Hazrat Shahjalal (R) International Airport.

Special Security Force was engaged in providing security to the Indian minister. Such security is usually arranged for a visiting head of state.

After the signing ceremony, Pranab called on Prime Minister Sheikh Hasina at Gano Bhaban. Earlier, he held separate meetings with Muhith and Foreign Minister Dipu Moni.

Pranab also met three Awami League leaders — Amir Hossain Amu, Tofail Ahmed and Suranjit Sengupta at the residence of Indian high commissioner in Dhaka.

He left for his country around 9:30pm.

THE DEAL,THETERMS The main terms and conditions of the credit line agreement include 1.75 percent interest (fixed) per annum, 0.5 percent commitment fee per annum on unutilised credit after 12 months from the date of contract approval, and 20 years' repayment period including a grace period of five years.

"This one-billion-dollar line of credit is the largest ever amount given by India to any country," said Pranab.

"I am confident that this credit line will be the stepping stone for a shared destiny and will transform our bilateral engagement," he said at the loan signing ceremony.

Muhith said, "India's assistance in improving the railway infrastructure will facilitate Bangladesh's transit to Bhutan and Nepal." THE FOURTEEN PROJECTS The first project is on procurement of six high-powered dredgers at $71.69 million. Of the dredgers, one will be used for dredging at Mongla Port while three for Bangladesh Inland Water Transport Authority and two for Bangladesh Water Development Board.

The second project is related to construction of an internal container river port at Ashuganj at a cost of $36.23 million. Bangladesh and India have recently signed an agreement under which Ashuganj in Bangladesh and Silghat in India have been declared ports of call.

The third project is to buy 10 broad gauge locomotive engines worth $31.55 million

for Bangladesh Railway. The fourth, fifth, sixth and seventh projects are also related to Bangladesh Railway.

Some 125 broad gauge passenger coaches will be bought at a cost of $53.63 million under the fourth project, while 60 tank wagons for fuel oil transportation and two break vans at a cost of $8.85 million under the fifth project.

The sixth one is on buying 50 metre gauge flat wagons and five break vans at a cost of $4.55 million for Bangladesh Railway.

Under the seventh project, two railway bridges — 2nd Bhairab Bridge and 2nd Titas Bridge — will be constructed, which will cost $ 120 million.

The next five projects are related with road transport. The eighth one is to buy 300 double-decker buses for Bangladesh Road Transport Corporation (BRTC) at an estimated amount of $29.65 million.

Under the ninth project, 50 articulated buses would be bought for BRTC at a cost of $6.12million.

The 10th one is related to development of road communications for a land port. Under the project, Sarail-Brahmanbaria-Sultanpur-Akhaura-Senarbadi road will be constructed at a cost of $33.82 million.

The 11th project is for construction of an overpass at Jurain rail crossing and a flyover at Malibagh rail crossing in Dhaka. These will cost $31.44 million.

Project number 12 is purely on connectivity between Bangladesh and India. Under this project, a road will be constructed between Ramgarh and Sabroom (Tripura's southern border town] at a cost of $14.53 million.

An amount of $150.86 million will be spent for the 13th project, which is for setting up power gridline between India and Bangladesh. Under the project, a 400KV grid interconnection between Bheramara of Bangladesh and Baharamapur of India will be setup.

The 14th project has four sub projects related to capacity building of Bangladesh Standard and Testing Institute (BSTI). Laboratories will be set up at a cost of $8.92 million to test foods, cement, brick and gold.

TEESTASHARE

At a press briefing after the deal signing ceremony, Pranab said India and Bangladesh have already exchanged drafts of an interim agreement on Teesta Water Sharing.

"We are discussing and it is progressing in a positive direction," he said and hoped that the agreement would be signed soon. Work on 50 river embankments on both sides has also started, added Pranab.

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