Bangladesh-China sign $335.78M loan deal for port upgrade near Bengal
What's the story
Bangladesh has signed a $335.78 million concessional loan agreement with China to expand and modernize the Mongla Port, located 80km from the Indian border. The deal was inked between the Bangladesh government and China's Export-Import Bank on Saturday, according to state-run BSS news agency. The concessional loan will carry an interest rate of 2% with a repayment period of 20 years, including five years' grace period.
Project details
Loan to build 2 container terminals at Mongla Port
The loan will be used to build two container terminals and dedicated cargo-handling yards, heavy logistics storage, the installation of modern quay gantry cranes, automated cargo systems, deep-water handling machinery, and the dredging and channel widening along the Pasur River to accommodate higher-capacity gearless and container vessels.
The project was agreed upon during Prime Minister Tarique Rahman's visit to Beijing in June.
Project
Interim government canceled Indian Economic Zone project
The development comes after an Indian Economic Zone project planned on 110 acres of land near Mongla Port was canceled by the Muhammad Yunus-led interim government last year due to delays in construction.
The land was earmarked for India under a 2015 bilateral agreement, and the Indian government had appointed Hiranandani Group subsidiary Evita Constructions to develop the site.
However, the Yunus government canceled the project, saying the developer failed to begin physical construction within the stipulated timeframe.
Geopolitical tensions
Mongla Port is located close to West Bengal
Mongla Port is located close to West Bengal and India's sensitive Eastern Naval Command operations zone.
A narrow stretch of land (22 kilometers) called the Siliguri Corridor or the "Chicken's Neck" links Eastern India to its northeastern states.
Constructing and managing critical infrastructure within 80 kilometers of the Indian border by Chinese state-owned enterprises would give Beijing an economic and logistical foothold near India's most important strategic bottleneck.
Water-sharing dispute
India previously raised concerns over China's increasing presence in Bangladesh
India had previously raised concerns over China's increasing presence in Bangladesh, especially in strategically important areas.
But China has sought to allay these fears by stating its cooperation with Bangladesh is aimed at improving livelihoods and "not directed against any third party."
The clarification was issued after India expressed unease over reports that China could play a major role in developing infrastructure along the Teesta River.