Padma Funding
Govt out to find sources but WB
Economists warn it not to hurry into the bridge project
The government has decided to approach Bangladesh’s potential bilateral and multilateral development partners other than the World Bank to finance the Padma Bridge project.
The finance ministry has instructed the Economic Relations Division to write to potential development partners for financial assistance to the project, ERD sources said.
‘We are going to request some of the potential development partners to finance the country’s largest project,’ a senior official of the ERD told New Age on Saturday.
The government is desperately looking for alternative funding sources after finally deciding not to take loan from the World Bank which had cancelled a $1.2billion
credit for the $2.9 billion mega project over allegation of corruption conspiracy.
The Asian Development Bank and the Japan International Cooperation Agency have also turned back from financing the bridge following in the World Bank’s footsteps.
‘As a co-financier, we are unable to continue our commitment under the current framework,’ the Dhaka office of JICA said in a statement on Saturday. JICA had committed
$400 million for the project.
The co-financers pulled out of the project two days after the government had let the World Bank know that it was withdrawing a request to review the cancellation of
the bank’s funding.
However, the Islamic Development Bank (IDB), a fourth co-financier for the Padma Bridge project, is yet to give a decision.
ERD official said, ‘Our main concern is to manage foreign assistance to our development projects. So, obviously we have to put in efforts to persuade our bilateral and
multilateral development partners to assist our projects as we have limited domestic resources.’
Malaysian government has already sent a draft proposal to construct the Padma Bridge. But the government is looking for some other potential sources to choose the best
one from them, he said.
Malaysia has agreed to invest $ 2.3 billion at a 6 per cent interest annually. But it is learnt that around $5.0 billion would be spent on the bridge project in the
end, including interest and maintenance cost, until 2050.
Malaysia proposed to build the 6.15km bridge when the World Bank was contemplating cancellation of its funding for the project last year.
The Malaysian proposal has also fixed the economic life-time of the bridge at one hundred years whereas it has proposed to hand over the bridge ownership to Bangladesh
after 50 years.
The ERD official said the Malaysian offer could be finalised later this week if the government did not receive proposals from other sources.
Meanwhile, some of the country’s economists have warned the government not to hurry to start construction of Padma Bridge project with alternative funding to meet its
election pledge.
They said it would not be wise to hurry into the project keeping the election in mind without a thorough review of the economic viability of the alternative sources of
funding.
Former caretaker government adviser Hossain Zillur Rahman said, ‘I would request the government not to hurry into the project with alternative funding.’
‘It could prove counter-productive and a grave mistake if the government takes such initiatives to construct the project without a proper review of the economic
viability of alternative sources of financing,’ he told New Age on Saturday.
Zaid Bakht, research director at the Bangladesh Institute of Development Studies, said, ‘Now the government has to redesign the Padma Bridge project as it has already
said the bridge will not have railway.’
Courtesy of New Age