Japan finalises $400m credit for building Padma Bridge

Japan finalised Monday the modalities of its pledged US$ 400 million credit for building one of the world's longest bridges over the river Padma, officials said Monday. The finance ministry officials said a Japanese official mission at a meeting with the government of Bangladesh also confirmed the availability of $250 million as loan for two other projects under Tokyo's 32nd official development assistance (ODA) programme for Bangladesh. "A mission from Japan held talks with us Monday to finalise the modalities of the loan deal for its 32nd ODA package. It was a fruitful meeting," Economic Relations Division (ERD) Secretary M Musharraf Hossain Bhuiyan told the FE. "Now we will sign a deal within this month for getting their $650 million in loan for Padma Bridge construction and two other schemes," he said. Bangladesh's largest bilateral donor, Japan has offered $400 million credit for building the bridge across the mighty river Padma at Mawa and Janjira points. After completing discussion with the different government authorities including those of the Ministry of Communications and the Local Government Division and the Bridge Division, the Japanese team sat for a wrap-up meeting with the ERD Monday to finalise the terms and conditions of the 32nd ODA package. The 6.15 kilometre Padma Birdge, the country's longest, will require $2.90 billion funds. The global lender World Bank (WB), Asian Development Bank (ADB) and Islamic Development Bank (IDB) have also assured the government of providing assistance for the bridge. Another ERD official said at the wrap-up meeting with the visiting Japanese mission, "We have discussed details on the terms and conditions of its pledged loan." "Since the discussion was fruitful, we will now take preparations for signing the loan deal within this month," he said. He said that the credit from the Japanese donor -- Japan International Cooperation Agency (JICA) -- will have to be repaid at a rate of interest at 0.01 per cent in 40 years, where 10 years' grace period will be provided. In addition to the $400 million loan for the Padma Bridge, the JICA will provide another $170 million for upgrading water supply facilities at Khulna WASA and $70 million fund for financing the Bangladesh's small and medium enterprises (SMEs). The government of Bangladesh started in 2008 the preparations for the road-cum-railway bridge project over the river Padma at Mawa-Janjira points at a cost of $1.46 billion. The cost has recently been raised to US$ 2.90 billion. The WB Board last Friday approved $1.20 billion loan for building the bridge. The ADB and the IDB have already completed negotiations with the government for providing $615 million and $140 million respectively in funds for building it. The government has already invited pre-qualification bids from international contractors to build the proposed road-cum-rail bridge. On its completion, the bridge will minimise economic imbalance between the southwestern region and the country's central part including Dhaka. The WB in an assessment said the proposed Padma Bridge is expected to boost Bangladesh's gross domestic product growth (GDP) by 1.2 per cent and that of the comparatively backward southwestern region by 2.3 per cent The report also showed that the Padma Bridge will help resuscitate of the Mongla Port and reduce poverty in the southwestern region. The government has committed to completing the bridge by 2013.