Paving the way for Padma Bridge construction

Khorshed Alam There had been a lot of hullagalla with regard to financing of the Padma Multipurpose Bridge Project, a huge but very desirable infrastructure project for development of the Bangladesh economy in the long run. The World Bank (WB) was ready to take the leadership of the consortium for financing the project. The other institutions agreeable to join hands were, among others, the Asian Development Bank (ADB), the Islami Development Bank (IDB), Japan International cooperation Agency (JICA) and some countries like China, Malaysia, Saudi Arabia and of course India, our nearest neighbour and a friend in need. When the time came for appointing a consultant to select a construction contractor for the project, the WB sensed, may be even detected some wrong-doing through their own corruption monitoring mechanism, which they must have shared with the government of Bangladesh (GOB). At the initial stage, the WB stopped the loan and asked for some corrective actions, which included removal of Communications Minister Abul Hussain from the Ministry and his Secretary of the Bridge Division Mosharraf Hossain Bhuiyan and a few other officials. They then asked the government to make an independent enquiry by the Anti-Corruption Commission (ACC) and the WB would appoint a panel with internationally- recognised legal experts to review the ACC report and also assess its authenticity. The WB, not being satisfied with the ACC report, reiterated its demand for removal of the earlier-mentioned officials and included Prime Minister's Economic Adviser Dr. Mashiur Rahman and a former State Minister of Foreign Affairs Abul Hasan Chowdhury for acting as the go-between between the Minister and the consulting firm that comprised both Bangladeshis and the Canadians. The Finance Minister sought an appointment with the WB President and even composed his delegation, which included Prime Minister's Adviser for International Affairs Gowhar Rizvi, who had already demonstrated his acumen in conducting successful international negotiations, particularly with India, which is a hard nut to crack. The news was given out to the media that the delegation, led by the Finance Minister, would leave for Washington any time palpably for public consumption. That appointment did not come then. Even after complying with almost all actions including filing of cases against the suspects by the ACC, the WB management was not satisfied for not including Hussain and Hasan in the case as possible culprits. The government tried to satisfy the WB by suggesting that the persons concerned would be kept under observation. Not being satisfied, the WB finally cancelled their loan to the project. The newly- appointed President of the bank, a South Korean veteran, upheld the decision taken by the Executive Board. Finally, the GOB asked for the WB's final decision by January 31, 2013 since the delay was affecting the cost of the project and hampering the government's search for alternative financiers that were reportedly aplenty. The government, getting the hunch that the WB might give out its final decision with the reasons that might bring the cat out of the bag and as such the Finance Minister all of a sudden announced that the government had withdrawn its request to the WB to give its final decision regarding financing of the Padma Bridge. The Finance Minister further promised that he would make a formal statement in the upcoming session of the Parliament in the new calendar year. He did make a statement in the Parliament on the January 07. He said with all the firmness he could command that the government had withdrawn its request to the WB to review its decision. In an emotion-choked voice, he told the House that there had been no corruption and in future also there would be no corruption in implementing the project and he would like to see work of the project started at the fag end of his career and life. We wish him good luck and at the same time, we like to express our concern regarding the project's early implementation. We consider this decision of the government an unfortunate one and a major setback that would put the clock of implementation of the project well behind schedule. What a pity! An appraisal of things to come in the future: The government will be toying with a number of options in realising the Padma Bridge which, among others, will be:- (a) Building the Padma Bridge by mopping up resources from within the country by revising the Annual Development Programme (ADP) of the current fiscal year (FY) by cutting the allocations of other sectors assuring the nation that there would be no cuts in the vital sectors such as food, agriculture and energy. How much resources can be harnessed within the current year and the next (for fulfillment of the Awami League's commitment in their election manifesto) remains to be seen. (b) Raising money from the share market: With so many scams yet to be addressed by the government and the integrity of the major players in the share market, this option appears to be a doubtful one. (c) Through Public-Private Partnership (PPP): The concept was laudable and many countries around the globe have utilised this tool with success, but though the full tenure of the government is virtually coming to an end, no breakthrough has been visible so far and hence this option also seems doubtful. (d) Tapping alternative foreign sources: We are aware of the friendly offers made by China, Malaysia and India, all our neighbours, which also are likely to reap the benefits from this project (we have no reservation on this in this age of globalisation). Recently, India has already handed over a cheque of five million dollars of its line of 100 million dollar credit which the Prime Minister said, would be used for the Padma Bridge project during the recent visit of the Indian Foreign Minister. We are not aware of the time-frame of the disbursement of the total Indian commitment, but this has definitely been intended to act as a morale booster for our Finance Minister. We understand that Malaysia has made a commitment to offer substantial amount but its rate of interest for the loan is likely to be 5.0 per cent per annum. That will be too costly. We are not aware of the Chinese offer and its conditions. Thus, all these options seem to us not to be very viable. How then can we go about financing the project? I may kindly not be misunderstood if I share a bit of my experience in dealing with the International Monetary Fund (IMF) and the WB first as the Principal Finance Secretary of the GOB from 1990 to January 1992, and then as Governor of Bangladesh Bank (BB) from end of 1992 to November 1996. I will mention only one case, that of financing of the Jamuna Multipurpose Bridge Project. Around 1989 and 1990, the GOB mooted the project and approached the WB to support its implementation. The WB staff that looked after the Bangladesh desk reported to President Preston that the project would not be viable in the near future because of dearth of resources from within. Then, we, in the Ministry of Finance (MoF) under the leadership of the then Finance Minister M.Saifur Rahman included a new budget line in the upcoming budget of FY 1990-91-titled Jamuna surcharge on all transactions within the country. When we had gone to Washington to attend the Joint Annual Meeting of IMF-WB in September or October 1991 as a shareholder, The Finance Minister, being a Governor of the WB and ERD Secretary Enam Ahmed Chowdhury an Alternate Governor while, I, as Finance Secretary, was Governor of the IMF while S.B.Chowdhury, Governor of BB, was the Alternate Governor to IMF. On the sidelines, we had many meetings with the officials dealing with Bangladesh. Finally, the Finance Minister and I had a meeting (say an audience) with President Preston. He gave a patient hearing. We strongly argued about the viability and feasibility of the Jamuna bridge project and we had informed him that we had introduced a surcharge for Jamuna Bridge. He called in his deputy Senior Vice-President Moyeen Qureshi, who later became President of Pakistan and said, "Moyeen, have a look at the proposed Jamuna bridge project of Bangladesh and report to me soon". The project was then approved by the Executive Board of the WB and once they got involved, it virtually became a joint responsibility of the GOB and the WB to line up other donors and financiers. We had organised a couple of donors' meetings to seek support of the likely donors. Now, the Jamuna bridge is there linking north and east Bangladesh. No false sense of ego or vanity or perception of interference in a sovereign country's domestic affairs should be allowed to deprive the country and its people of the benefits of large projects that are beyond the capability of the government. We are not sure if there were any overtures at this late stage by our Prime Minister, who is widely respected, to break the ice. It is said, there is no last word in diplomacy. Without the induction of the WB, we fear, the Jamuna Bridge will remain a far cry or a deer of gold meaning "Sonar Harin." We might bear in mind that we, being listed as a least developed country, are entitled to credit through the soft window of the WB, which is IDA. There the annual rate of interest is 3/4th of 1.0 per cent and the loan is repayable in 30 or 40 years with a grace period of 15 years. We would wish the government well hoping that it keeps the interest of the country uppermost in its mind. The writer is former Governor of Bangladesh Bank & former Principal Finance Secretary. alamk1230@gmail.com