The Padma Bridge is a very important scheme of Bangladesh for its development. It will not only bring about infrastructural development but also enhance economic and social welfare of the people of the connected areas. It will save many lives for it will replace the unsafe ferry journeys. However, there had remained some criticalities regarding its financing, because one of the donor financers have charged the padma bridge scheme of corruption, from bribing of high officials by a Canadian Construction consultancy company. For this, many of the other financers are backing, and GoB has to think of alternative ways, each of which comes with their own cost. The research aims at performing a cost benefit analysis of all the financing alternatives, and derives a conclusion on the basis of sufficient analysis. The research is a qualitative one, and is based primarily on secondary data source. Data analysis is done by literature rivews, and consulting supporting materials.
Background of the study
The Padma Bridge is a multipurpose road-rail bridge across the Padma River to be constructed in Bangladesh. When completed it will be the largest bridge in Bangladesh and the first fixed river crossing for road traffic. It will connect Louhajong, Munshiganj toShariatpur and Madaripur, linking the south-west of the country, to northern and eastern regions. The total area of land to be acquired and required for its components is 918 hectares. The two-level steel truss bridge will carry a four-lane highway on the upper level and a single track railway on a lower level. The project will include 6.15 km long and 21.10 m wide bridge, 15.1 km of approach roads, toll plazas and service areas. The bridge has provisions for rail, gas, electric line and fibre optic cable for future expansion. The project would have 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 The bridge will contribute significantly towards facilitating the social, economic and industrial development of this relatively underdeveloped region with a population of over 30 million.
On Jun 29, 2012 the World Bank cancelled its $1.2 billion loan pledged for the Padma Bridge project saying that they had credible evidence for corruption in the Padma project. In the light of loan cancellation by the lead financer World Bank, the Asian Development Bank (ADB) also withdrew its fund from the project on July 2, 2012. Another co-financier Japan International Cooperation Agency (JICA) does not yet cancel its funding to the project, expressing a hope that the government of Bangladesh will deal with the current issues in a constructive way. The Islamic Development Bank (IDB) is still interested to fund the megaproject. After the cancellation of World Bank and ADB loan, it became essential to look for alternative financing sources. The government already outlined plans for mobilization of national resources for the construction of the bridge. There are other plans of reviving old or getting new international donors. However, each of the alternative sources has their own costs and benefits. Objective
The objective of the study is to make a cost-benefit analysis of the various alternative financing sources proposed by the GoB. There are three major alternative plans for financing the multi-purpose road-rail bridge: First, by reviving the WB-led arrangement for the $2.3 billion credit from the above-mentioned four development partners. Secondly, by implement the project through a new consortium of the ADB, JICA and IDB. Thirdly, by floating fresh tender and the successful bidders will have to finance a part of the project. Fourthly, by constructing the bridge with the government's own resources if other options do not work. Under this plan, there are three major...