The fate of Bangladesh’s biggest infrastructure project hangs in the balance
DHAKA — Asian funding agencies, The Asian Development Bank (ADB) and Japan International Cooperation Agency (JICA) provided much needed, albeit temporary relief to the government on July 31 choosing not to cancel their loan for the US$2.9 billion Padma bridge project, for another month.
The Padma bridge project has been in peril since the World Bank cut its US$1.2 billion credit line for the 6km-long road-rail bridge over the Padma River on June 30, citing corruption concerns, in particular the government’s failure to investigate claims of high-level fraud in connection with the project.
Prime Minister Sheikh Hasina had accused the World Bank of treating the country as “guinea pigs” and defiantly announced that Bangladesh would finance the project itself.
Apart from the US$ 1.2 billion that is to be provided by the World Bank, the ADB, JICA and the Islamic Development Bank have pledged to lend the government US$ 615m, US$ 400m and US$ 140m respectively for the project.
“[The] ADB and JICA have extended their loan agreement deadline by a month. It’s good news for us. Now, let us see what the World Bank does. I believe the World Bank has to come back,” Finance Minister AMA Muhith told reporters on July 31.
The government however is still under pressure to address the issues of corruption raised by the World Bank by the end of this month, failing which the ADB and JICA have warmed that they would not fund the country’s largest infrastructure project.
The two agencies would consider funding the project even without the World Bank if the corruption issues are properly dealt with senior government officials told local newspaper The Daily Star after talks between ADB, JICA and Bangladesh’s Economic Relations Division (ERD) on July 31.
In the meantime, Information & Communications Technology Minister Syed Abul Hossain who is at the heart of the corruption controversy has been asked to step down. Other senior officials working on the project have also been asked to go on leave.
The Padma bridge project is a key part of the ruling Awami League’s 2008 election manifesto and is Bangladesh’s most ambitious infrastructure project to date aimed at delivering development to the poor southern part of the country.
It is estimated that some 30 million people in the region could directly benefit from the new road and rail connection. At present all traffic across the Padma River has to rely on ferries, which are infrequent and often unsafe.
The bridge will also connect Bangladesh’s principal seaports and provide a direct link to the Dhaka-Chittagong Highway.