Govt to pick lead-donor for Padma Bridge next week

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FHM Humayan Kabir
Key government ministries would next week select the lead-donor for financing of the Padma bridge in an effort to coordinate multi-donor bankrolling of the country's largest infrastructure project, officials said Thursday.
Finance minister AMA Muhith would make the selection in a meeting of all the associated ministries and divisions on December 21 - a task that has become essential for execution of the US$2.70 billion project in time.
Economic Relations Division officials said anti-poverty lenders, the World Bank and the Asian Development Bank (ADB), are in the race for the lead-donor honour after they assured the government of financing US$1.75 billion for the project.
"The government will select the lead-donor in a key inter-ministerial meeting on December 21. The finance minister will chair the meeting," an ERD official told the FE.
Manila-based ADB, which has already provided nearly $27million loan for designing the multipurpose bridge, has committed $550 million credit last week for constructing the bridge, up $250 million from its earlier assurance.
The World Bank in a meeting with the government's Bridge Division officials has also assured of raising financial support to $1.20 billion from its earlier pledges of $460 million for building the 6.15 kilometres long rail-cum-road bridge.
"One of the two development banks will be selected as the lead-donor for the project. We need to make the selection quickly to coordinate multi-donor lending of the project and execute other necessary ground works," he said.
The lead-donor will be responsible for channeling funds and act as an intermediary between the donors and the government on major decisions such as final design of the project, tendering and bid selection.
The government has already appointed Auckland-based firm Maunsell-Aecom for designing and costing of the bridge - the largest infrastructure project in the country's history.
The firm has primarily estimated that the proposed steel truss-made bridge and river training would cost $2.4 billion dollars and take four years to complete. The cost later went up by $300 million following changes in design.
The government has been trying to mobilise the entire cost of the project from multi-lateral and bilateral donors. But only in recent weeks, the donors have agreed to bankroll almost the entire cost of the project.
Officials said the government heaved a huge sigh of relief last week when the WB and the ADB pledged to increase their fund commitment to $1.75 billion from their earlier assurance of $760 million.
Another ERD official said the Japan government would provide at least $300 million while the Islamic Development Bank (IDB) $130 million and UAE's Abu Dhabi Fund $30 million.
"We are now trying to get written confirmation from major lenders. We are hopeful we will get their formal commitment within a couple of weeks," he said.
The move follows a request by the communications minister to ERD last week to obtain firm loan commitments from the lenders, as his ministry wants to float tender for the bridge construction early next year.
"After selection of lead-donor, mobilisation of funds from the donors will be easy for the government," the official added.
The Awami League government has made Padma Bridge one of its top priority projects and it wants to finish the construction by 2013, a year before its five-year tenure expires.