Line of Credit extended by the Indian government through the Export-Import Bank of India to neighbouring countries for development projects, has become a key instrument for regional connectivity initiatives. These LOCs mandate that projects are to be contracted to Indian entities or consortium led by Indian entities.
Egis India Consulting Engineers Pvt Ltd, in December, secured a tender for project management consultancy for the upgradation of Mongla Port in Bangladesh, the second largest port in the neighbouring country. The project is being financed out of LOC extended to the Government of Bangladesh by India.
“I will tell you how we came into the picture. This particular Expression of Interest was launched by EXIM Bank of India. It’s a Line of Credit. This upgradation of port comes under the third concession Line of Credit of the Government of India through EXIM Bank,” said Manoj Nainani, Executive Director at Egis, South Asia, in an interaction with ET Infra.
“If I talk about the estimated cost of the project, it is BDT (Bangladesh Taka) 6,014 crores. The project was approved in 2018. Out of this 6,014 crores, 1,555 crores comes from the Government of Bangladesh, 4,460 crores has come from the Line of Credit of EXIM Bank,” said Nainani.
Aggressive forays by China into port development, which could potentially have military use, in and around India’s neighbourhood, have unnerved New Delhi in the recent past. As geopolitical tensions rise and a new era of cold war politics ensues, India is enabling private infrastructure companies to secure its interest in the neighbourhood and abroad through bilateral agreements.
“That is why you know EXIM Bank was pushing for this particular project and because of whatever reasons that if there is no consultant, how will they take it forward? That is why the consultant (Egis) is now in place. The rest of the activities will come online. We are very excited,” said Nainani, emphasising on the bilateral nature of the project.
Not only the project management consultancy has been secured by an Indian firm, the engineering, procurement and construction or EPC contract of the project will also see an Indian hand.
“For this particular (project) as far as our scope is concerned, we are responsible for the engineering studies, that is going to be the first phase and then the second phase is that we are going to launch the tender for the EPC contractor and the third phase, we are going to supervise this contract,” said Nainani. The tender for the EPC contract is expected to be launched in January and only Indian companies will be eligible to bid for it, a condition mandated by the EXIM Bank.
REGIONAL CONNECTIVITY GRID
Mongla Port’s upgradation is key to enhancing the region’s potential for trade, commerce as well as connectivity between BBIN countries.
“This particular port is very important, where the Nepal-Bhutan nearby area is covered. The Mongla Port is located on the Bangladesh side of Sundarbans … they call it as a port-of-call for inter-country trade,” said Nainani.
The construction of Padma Bridge, Khulna-Mongla railway link, Khan Jahan Ali airport, among other development projects, have been undertaken to revive the Mongla Port and south western zone of Bangladesh, EXIM Bank had highlighted in its tender.
The port will also serve the Indo-Bangladesh Protocol Route, which connects India’s National Waterway 1 and 2, which provides an effective river connectivity between north east and rest of India bypassing the narrow Siliguri Corridor up in the north. After completion of the upgradation project, Mongla Port would be able to handle additional 15 million tonne cargo and 400,000 TEU containers as against existing capacity of 10 million tonne cargo and 100,000 TEU containers annually and serve as a major transshipment hub. Nainani outlined that Egis India is confident of adhering to the timeline of completing the project in five years.
