Since Pakistan scrapped the regional connectivity initiatives proposed by India through the SAARC platform, New Delhi has continued its efforts to improve regional connectivity between the BBIN nations – Bangladesh, Bhutan, India, Nepal – and the countries in the Gulf of Bengal doubles.
The line of credit extended by the Government of India through the Export-Import Bank of India to neighboring countries for development projects has become a key tool for regional connectivity initiatives. These LOCs stipulate that projects are awarded to Indian companies or consortium led by Indian companies.
Egis India Consulting Engineers Pvt Ltd won a tender for project management consultancy in December for the modernization of the Port of Mongla in Bangladesh, the neighboring country’s second busiest port. The project is funded from LOC provided by India to the Government of Bangladesh.
“I’ll tell you how we got in the picture. This special expression of interest was created by EXIM Bank of India. It’s a line of credit. This port upgrade falls under the Government of India’s third concession credit line through EXIM Bank,” said Manoj Nainani, executive director at Egis, South Asia, in an interaction.
“When I talk about the estimated cost of the project, it is BDT (Bangladesh Taka) 6,014 crores. The project was approved in 2018. Of these 6,014 crores, 1,555 crores are from the Government of Bangladesh, 4,460 crores are from the EXIM Bank line of credit,” Nainani said.
Aggressive Chinese incursions into port development, which could potentially be used for military purposes, in and around India’s neighborhood have unsettled New Delhi in the recent past. As geopolitical tensions mount and a new era of Cold War politics dawns, India is allowing private infrastructure companies to secure its interests locally and abroad through bilateral deals.
“That’s why you know EXIM Bank pushed for this particular project and because of
For whatever reason, if there is no advisor, how are they going to move it forward? That is why the advisor (Egis) is now in place. The rest of the activities will come online. We are very excited,” said Nainani, emphasizing the bilateral nature of the project.
Not only was the project management consultancy provided by an Indian company, the project’s engineering, procurement and construction or EPC contract will also come from India.
“For this particular (project), in terms of our scope, we are responsible for the engineering studies, that will be the first phase, and then in the second phase we will start the tender for the EPC contractor and in the third phase we will have that Monitor contract,” Nainani said. The bidding for the EPC contract is expected to start in January and only Indian companies can apply for it, a condition mandated by EXIM Bank.
REGIONAL CONNECTIVITY NETWORK
The modernization of the Port of Mongla is key to enhancing the region’s potential for trade, commerce and connectivity between BBIN countries.
“This particular port is very important as it covers the nearby Nepal-Bhutan area. The port of Mongla is on the Bangladeshi side of Sundarbans…they call it a focal point for trade between the countries,” Nainani said.
The construction of Padma Bridge, Khulna-Mongla Railway, Khan Jahan Ali Airport and other development projects have been carried out to revitalize Mongla Port and Bangladesh’s southwestern zone, EXIM Bank had highlighted in its tender.
The port will also serve the Indo-Bangladesh Protocol route connecting India’s National Waterway 1 and 2, providing an effective river link between the north-east and the rest of India, bypassing the narrow Siliguri corridor to the north.
Upon completion of the modernization project, the port of Mongla would be able to handle an additional 15 million tons of cargo and 400,000 TEU containers compared to the existing capacity of 10 million tons of cargo and 100,000 TEU containers annually and serve as a major transhipment hub. Nainani stated that Egis India is confident of meeting the schedule to complete the project in five years.