Padma Bridge Financing

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Table of Contents
INTRODUCTION2
BACKGROUND OF THE STUDY3
2.1 Necessity of Padma Bridge3
2.2 About Padma River4
2.3 Project Area5
2.5 Environmental Impact5
2.6 Socio-Economic Impact6
INITIAL FINANCING OPTION OF PADMA BRIDGE7
3.1 Investment and Financing Plans7
3.2 Funding Arrangement8
ALTERNATIVE OPTIONS FOR PADMA BRIDGE FINANCING11
4.1 Fund collection through ADP 12
4.2 Fund Collection through Bond16
4.3 Private Fund Collection18
COST AND BENEFITS ANALYSIS OF DONOR FUND19
COST AND BENEFITS ANALYSIS OF OWN FUND 21
OBSERVATION AND FINDINGS23
Conclusion25

1. INTRODUCTION
The Padma Multipurpose Bridge Project aims to remove the last major physical barrier in the road connection between Dhaka and the Southwest and South Central regions of Bangladesh, home to about one quarter of the Bangladesh population. Currently there is a rather unreliable ferry connection over the Padma River with limited capacity and long waiting times. Ferry services are sometimes interrupted for days during fog and high floods. A number of the ferryboats are obsolete; they are often overloaded and there are frequent accidents, some resulting in considerable loss of life. The construction of the Padma Bridge will replace the unreliable and unsafe ferry connection with a reliable and safe fixed river crossing. The bridge will shorten the distance from the Southwest to Dhaka by 100 km and travelling time will be considerably reduced. When completed a reliable highway connection will be established between Dhaka and the land port of Benapole, the seaport of Mongla and the district capitals of Khulna and Barisal. The provisions for a railway line on the Padma Bridge will make it possible to construct a new railway connection between Dhaka and the Southwest within the framework of the Trans Asian Railway network. Padma Bridge will also include options for major utility connections to the Southwest including gas, power transmission, and communication lines. The Padma Bridge will be the longest bridge of its type with 6.15 kilometer of length. This will connect the south-western parts with the capital and is expected to save hundreds of thousands of working hours and huge transport costs.

The Padma Bridge is a high priority national project. It would change the economic landscape of the south-western region and ultimately uplift the national economy. The project was initially co-financed by the government of Bangladesh, the World Bank, the Asian Development Bank, the Japan International Cooperation Agency (JICA) and the Islamic Development Bank. The Bangladesh Bridge Authority is the executing agency of the project. Project cost is estimated to be US$3.00 billion. Construction of the bridge was expected to commence by early 2011 and be ready for major completion in 2013 and completed all sections by 2015.After the world bank claimed to have found credible evidence of a high-level corruption conspiracy among selected government officials involved in the Padma Bridge project, the funding from the world bank and other donor organizations have stopped. Thus government decided to take alternative sources of funding for this project such a self funding, funding from other particular countries.

2. Back ground of the study

Necessity of Padma Bridge
The construction of the bridge would fulfill the long-standing dream of the people of the Southwest region to have a permanent crossing over the Padma River. The Padma Bridge is expected to unlock the potential and transform the lives of nearly 30 million Bangladeshis living in the country's Southwest region. By reducing distances to major urban centers like Dhaka by almost 100km, the bridge will facilitate regional trade, reduce poverty while accelerating growth and development in the country as a whole. By facilitating transportation across the river, the bridge is expected to lead to a greater integration of regional markets within the Bangladeshi national economy. Given the...
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