Vol. 5 Num 156 Thu. October 28, 2004  
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Sign deal by Oct or lose $15m loan
Spain warns Bangladesh over dredger purchase credit

The government of Spain has threatened to withdraw a soft loan amounting to $15 million, equivalent to around Tk 90 crore, from Bangladesh if Dhaka fails to sign an agreement by this month for using the money.

The loan was granted in 1998 for buying three dredgers to undertake operations in the rivers for maintaining their navigability, sources said.

The Spanish embassy in New Delhi in a recent letter asked Bangladesh to sign agreement to receive the money within this month, categorically informing that the loan would be cancelled otherwise.

The prime minister's office also asked the Ministry of Shipping to take immediate steps to receive the money.

Admitting the threat of money withdrawal by Spanish government, Shipping Secretary Ismail Zabihullah told The Daily Star that the ministry processed all the documents and submitted those to the cabinet purchase committee for final approval.

"The committee is scheduled to meet on Wednesday and we hope they would approve the proposal," he said, adding that if the cabinet committee approves the proposal, there would be no problem in getting the money.

Meanwhile, the shipping ministry sources said the delay in releasing the money was due to some other factors related to the donor country.

There was an international tender for purchasing dredgers where the lowest offer was higher than the loan amount. As it was a tied loan, Bangladesh has to accept the tender from the companies of the donor country.

Consequently, that tender was cancelled and bids were invited in a re-tender which took much time, the source commented.