Funding no more a problem for Padma multi-purpose bridge
Friday, 18 December 2009
Munima Sultana
Leading development partners have assured the government of lending US 2.4 billion for the construction of Padma multi-purpose bridge, ending uncertainty over meeting the resource gap for the country's largest infrastructure project.
The World Bank has hinted that it would double its assistance from $ 600 million to $1.2 billion, almost half of the project cost, while Asian Development Bank (ADB) has agreed to scale up lending from $300 million to $600 million.
"We have received enough funding commitment to build the project. There are no shortfall in financing the project," said a senior official.
Among other partners, he said, Japan International Cooperation Agency (JICA) and Islamic Development Bank (IDB) are also hoping to increase their lending.
"The assurances we are now getting will be in surplus of the project's estimated cost of $ 2.7 billion," said another official preferring anonymity.
Though the final commitment would come after respective donors' co-financing plan, officials said the government is very hopeful of a positive outcome.
The donors had earlier pledged to provide only $1.2 billion dollars for the 6.15-kilometre and 21.10 metre width road-cum-rail bridge which left the government with a challenging task to fill up the funding gap from domestic sources.
After a series of meeting with the government in November, the WB and ADB hinted to scale up lending but was left with a $600 million gap.
In a desperate move to complete the Padma two-tier bridge within the present government's tenure, the finance ministry was considering to raise a big portion of the money through sale of bonds in the share market --- an option considered "not viable" by the World Bank.
"Now there is no need to manage funds from other sources," said the official adding that uncertainty over funding ends as they have got encouraging words of assurances from top donors.
"Infrastructure investment is a good and safe investment as its return as soft loan is confirmed compared with other projects," he said.
Officials said the development partners also feel encouraged to give soft loan to the construction of the world ranking bridge being sure of less possibility of misuse of the money.
Apart from this, the donors consider the bridge would leave tremendous impact on alleviating poverty in the southern part of the country convincing them to increase the lending assurance, said the officials.
The cost of country's largest infrastructure project was initially estimated at $1.8 billion but it hit $ 2.7 billion dollars on enhanced cost of construction materials and a decision to build the bridge with steel-truss-composite.
Auckland-based Maunsell Aecom, which is designing the project, added electric train tracks, improved safety requirements, wider railway approach bridge and tourism facilities, compelling the authorities to revise the budget upward.
The consulting firm has already submitted the scheme design and river training design of the project, two important designs to start the bridge construction to the Bangladesh Bridge Authority. The government has already approved the scheme design but is working on approval of the second stage design.
Until now Bangabandhu Multipurpose Bridge over the river Jamuna is the country's largest bridge, with length 4.80 kilometres. It was constructed in 1997 at a cost nearly $1.0 billion.
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.
Leading development partners have assured the government of lending US 2.4 billion for the construction of Padma multi-purpose bridge, ending uncertainty over meeting the resource gap for the country's largest infrastructure project.
The World Bank has hinted that it would double its assistance from $ 600 million to $1.2 billion, almost half of the project cost, while Asian Development Bank (ADB) has agreed to scale up lending from $300 million to $600 million.
"We have received enough funding commitment to build the project. There are no shortfall in financing the project," said a senior official.
Among other partners, he said, Japan International Cooperation Agency (JICA) and Islamic Development Bank (IDB) are also hoping to increase their lending.
"The assurances we are now getting will be in surplus of the project's estimated cost of $ 2.7 billion," said another official preferring anonymity.
Though the final commitment would come after respective donors' co-financing plan, officials said the government is very hopeful of a positive outcome.
The donors had earlier pledged to provide only $1.2 billion dollars for the 6.15-kilometre and 21.10 metre width road-cum-rail bridge which left the government with a challenging task to fill up the funding gap from domestic sources.
After a series of meeting with the government in November, the WB and ADB hinted to scale up lending but was left with a $600 million gap.
In a desperate move to complete the Padma two-tier bridge within the present government's tenure, the finance ministry was considering to raise a big portion of the money through sale of bonds in the share market --- an option considered "not viable" by the World Bank.
"Now there is no need to manage funds from other sources," said the official adding that uncertainty over funding ends as they have got encouraging words of assurances from top donors.
"Infrastructure investment is a good and safe investment as its return as soft loan is confirmed compared with other projects," he said.
Officials said the development partners also feel encouraged to give soft loan to the construction of the world ranking bridge being sure of less possibility of misuse of the money.
Apart from this, the donors consider the bridge would leave tremendous impact on alleviating poverty in the southern part of the country convincing them to increase the lending assurance, said the officials.
The cost of country's largest infrastructure project was initially estimated at $1.8 billion but it hit $ 2.7 billion dollars on enhanced cost of construction materials and a decision to build the bridge with steel-truss-composite.
Auckland-based Maunsell Aecom, which is designing the project, added electric train tracks, improved safety requirements, wider railway approach bridge and tourism facilities, compelling the authorities to revise the budget upward.
The consulting firm has already submitted the scheme design and river training design of the project, two important designs to start the bridge construction to the Bangladesh Bridge Authority. The government has already approved the scheme design but is working on approval of the second stage design.
Until now Bangabandhu Multipurpose Bridge over the river Jamuna is the country's largest bridge, with length 4.80 kilometres. It was constructed in 1997 at a cost nearly $1.0 billion.
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.