What Is the Present Situation of the Loan of Padma Bridge

Topics: Bangladesh, Central bank, Sheikh Hasina Pages: 5 (1499 words) Published: April 1, 2013
http://www.lawyersnjurists.com/articles-reports-journals/others-articles-reports-journals/investigating-report-padma-bridge/ Padma bridge an unwieldy challenge: Experts

Experts feel it will never be easy to bridge the mighty Padma without World Bank funding, now that the Asian Development Bank has also backed off from funding the project. The ruling Awami League will have to pay a 'political price' if it cannot execute the project, what with the parliament election barely a year away. The Padma bridge project was one of its key electoral commitments. No wonder, the Hasina government is desperate to start work on the project with whatever resources it can manage. While Finance Minister AMA Muhith on Saturday said that the government wanted to start the construction work within two months, economists and engineers alike doubt whether that will be possible. Two years of uncertainty over World Bank funding came to an end on Thursday when the Bangladesh government formally withdrew its request to the World Bank for financing the country's biggest-ever infrastructure development project. The World Bank in a media statement on Friday confirmed that it had received a letter from the government regarding the withdrawal of the funding request. Out of the $2.9 billion required to build the 6.15-kilometre bridge along with railway track at current prices, the World Bank had committed $1.2 billion. The Asian Development Bank which had committed $ 600 million backed out soon after. The government says it will mobilize its own funds and look out for alternative sources of funding. Hints have been dropped about possible commitments from India, China and Malaysia. While it is entirely possible that either of the two Asian giants, India or China, can mobilize the kind of funds that would be needed to fill in the void left by the World Bank and ADB's departure, there is no information that either of them have made any definite commitments. Nor is there any information of a commitment from Malaysia. At best, negotiations may be at a preliminary stage.

It is unlikely that both India and China will agree to fund the project together, which would be ideal if that was possible. Bangladesh also risks incurring the wrath of one if the other to fund the project, an inevitable fallout of the Sino-Indian competition for influence in Asia. Negotiating the financial and technical details of such a huge project takes time and unless backroom parleys are at an advanced stage with any one or two of the possible funding agencies, it is unlikely that alternative sources of funding can be finalized within the next six months. By then, the monsoon sets in, making the engineering part of the work difficult to execute. Two former Bangladesh Bank governors, Mohammed Farashuddin and Salehuddin Ahmed, have said that it would be a huge challenge for the government to begin the construction work by doing up the project all over again, Research Director of Bangladesh Institute of Development Studies (BIDS) Dr. Zaid Bakht expressed similar concerns and doubted whether the construction work would begin within the tenure of the present government. Former Advisor to the caretaker government Akbar Ali Khan says that he is waiting to see what plans the government has to get the project going against all odds. They all agree on one point - an alternative to the World Bank will not be easy to find and if found, not easy to deal with. Farashuddin, who was the central bank governor during the last Awami League government, told bdnews24.com on Saturday that the government would need to start the construction work right away. "It should not wait for the World Bank decision for renewing its financing," he said. He said that building the bridge was one of the most important electoral pledges of the government. "It will cost the government politically to a great extent in the next parliamentary election if it fails to begin the construction work of the bridge. That's why the...
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