China, which has been one of the top investors in Bangladesh, has been forced to withdraw from three infrastructure projects in the country. The development took place after Chinese companies were hit by allegations of embezzlement of funds leading to increase in project costs. These projects in the railway sector included building a mixed gauge double line from Joydebpur in Gazipur to Ishwardi in Pabna near the capital Dhaka, the Economic Times said.
The projects had been undertaken on a government-to-government (GTG) basis. However, Beijing hired Chinese contractors and “there was no opportunity to hire contractors for the projects through international tenders,” the newspaper added.
In another report, Nikkei Asian report pointed out that “China has withdrawn funding for Belt and Road infrastructure (BRI) projects in Bangladesh after the recipient country re-evaluated the programs and downwardly revised their costs.”
Experts in Bangladesh have expressed concerns over this issue, especially as several other countries have also highlighted issues of opacity in the lending pattern of the Chinese. China was awarded more than one-third of the proposals made in Bangladesh’s economic zones between 2018 and 2020.
The report added that “at least two rail projects are now uncertain, with another also feared to be in limbo.” It said that these are among the three of many projects listed in a memorandum of understanding signed during Chinese President Xi Jinping's visit to Dhaka in 2016. China's newfound reluctance has also led to uncertainty and delays.
According to Nikkei Asia, professor of international relations at the University of Dhaka, Imtiaz Ahmed said every investor would first consider their potential return and that China might simply be withdrawing funds after taking into account how much profit might be left. "Geopolitics is a secondary matter in this case," he was quoted as saying.
An analyst on condition of anonymity told India Narrative that China’s opaque lending pattern has finally come to light as many countries have started facing these problems.
Beijing’s international loans now amount to over 5 per cent of the global GDP. The opacity in lending towards the much-hyped Belt and Road Initiative (BRI) has also led to serious concerns across the board especially as cost of the project has escalated significantly over the last few years. It is worthwhile to note that Beijing has never published any official data on its lending and investments leading to a web of confusion, according to a report published by India Narrative earlier.