Bangladesh to pay more for China loan than for Indian loan

[Water Car Engineer]

DHAKA: To set up a fertiliser factory and lay out a telecom network, Bangladesh will be paying more for a Chinese $770 million loan than for India's $1 billion commitment. It is accepting the Chinese condition for selecting two Chinese firms because it has no alternative source of funding for these projects, officials said. Such selection of contractors is required under the new lending policy of China, The Daily Star newspaper said quoting sources at Economic Relations Division (ERD). This will leave no scope for Bangladesh to get the best price offer or look for technology options, the newspaper said Tuesday. Interest rate on the Chinese loan is two per cent and it is payable within 20 years with a five-year grace period. Besides, the commitment charge is 0.2 per cent and management fees are 0.2 per cent. ERD sources mentioned that the interest rate is "slightly higher" than that of the recently signed deal for $1 billion credit from India -- for a range of projects particularly in the transport and communication sectors. The rate of interest on Indian credit is 1.75 per cent and commitment charge is 0.5 per cent. Dhaka has agreed in principle to accept the Chinese loan after discussing the issue at several high-level meetings "as it has no alternative source of funding for these two projects", the officials told the newspaper. Once the prime minister gives the go-ahead, the ministries concerned will take steps to ink the deal. Of the loan amount, $559 million will be for the setting up of Shahjalal Fertiliser Factory and $211 million for the introduction of 3G technology and expansion of the existing 2.5G network, ERD sources added. A meeting chaired by Finance Minister A.M.A. Muhith noted that in signing the commercial contract, the highest caution has to be exercised to ensure that Bangladesh's interests are upheld.

Bangladesh to pay more for China loan than for Indian loan - The Economic Times

 

[TopCat]

China's loan is a supplier's credit to set up profit making commercial factories. India's loan is for infrastructure to be used by indian cargo's and trailers for transit. India is going to setup similar profit making power station but they are asking for 50% equity share when 50% money will come from foreign lending agencies with high commercial rates.


There are plenty of Chinese infrastructure project where money was given as grant not even loan..

 

[somebozo]

Indian loan was issued after Chinese. It was competing against the Chinese. Since the Indian bid was accecpted its bound to be lower than Chinese hence "competitive". Much to the dismay of India Times and pity the journalist making a news out of this!
All indian press thinks about is how to manipulate and mislead public opnion!

 

[LaBong]

There are plenty of Chinese infrastructure project where money was given as grant not even loan..

Really? Such as?

 

[justanobserver]

It was competing against the Chinese. Since the Indian bid was accecpted its bound to be lower than Chinese hence "competitive".

You really do live up to your name.

There were no 'bidding wars', the India loan is for development of highways, the Chinese one is for fertilizers and 3G

Completely different

 

[BanglaBhoot]

Practically Bangladesh gets nothing from the Indian loan. Its a complete waste of money and time for Bangladesh.

 

[footmarks]

Practically Bangladesh gets nothing from the Indian loan. Its a complete waste of money and time for Bangladesh.

As expected. Nothing to add value, just bashing India.

 

[BanglaBhoot]

As expected. Nothing to add value, just bashing India.

No just stating the obvious. An India to India road and rail link does absolutely nothing for Bangladesh.

 

[Agnostic_Indian]

No just stating the obvious. An India to India road and rail link does absolutely nothing for Bangladesh.

India to india ?
or india to bangladesh

 

[footmarks]

No just stating the obvious. An India to India road and rail link does absolutely nothing for Bangladesh.

It does, if it goes through BD, and BD labours, engineers and construction companies get paid for making it. Take it as a road being built in BD rather than as a project funded by India, and you will realize. Though I don't expect you to understand that, considering your unilateral and never-ending hatred towards India.

 

[deckingraj]

China's loan is a supplier's credit to set up profit making commercial factories. India's loan is for infrastructure to be used by indian cargo's and trailers for transit. India is going to setup similar profit making power station but they are asking for 50% equity share when 50% money will come from foreign lending agencies with high commercial rates.


There are plenty of Chinese infrastructure project where money was given as grant not even loan..

I am not sure why is it difficult to consume the information on its merit....I know that many people here were criticizing loan by GOI and understand this news would have been a set abck for them but understand one thing...."There aint any free lunch".....Whenever BD will get any loan/grant or anything from GOI/China or for that matter any country there will some strings attached to it so that the donor/lender country gets some mileage out of it...It is as simple as that...It is astonishing that in love for China and hate for India such a simple fact is ignored....

 

[deckingraj]

No just stating the obvious. An India to India road and rail link does absolutely nothing for Bangladesh.

So roads in that part of BD are absolutely of no-use for BD, right??? Would you mind sharing a bit more on it and inform the readers why???

I am amazed how can someone say that Infrastructure development in any part of the country is not worth???

 

[Baahubali]

No just stating the obvious. An India to India road and rail link does absolutely nothing for Bangladesh.

Mr. Munshi,

You are not 'stating the obvious'. Instead you are 'stating something you want to be taken as obvious by others'

Do you understand the difference?

 

[kak1978]

Practically Bangladesh gets nothing from the Indian loan. Its a complete waste of money and time for Bangladesh.

A loan is a loan and it will come with some costs (interest or something else) Just compare the two loans instead of trying bash anything Indian

 

[TopCat]

I am not sure why is it difficult to consume the information on its merit....I know that many people here were criticizing loan by GOI and understand this news would have been a set abck for them but understand one thing...."There aint any free lunch".....Whenever BD will get any loan/grant or anything from GOI/China or for that matter any country there will some strings attached to it so that the donor/lender country gets some mileage out of it...It is as simple as that...It is astonishing that in love for China and hate for India such a simple fact is ignored....

Its your India Times brought comparison here. As I said in my earlier post that two loans are completely different. One is commercial profit making industrial project and another one is infrastructure project. India got far better bargain in the commercial Power Plant deal where 50% equity is given to them.