Malaysia offers $2.3bn fund to bridge Padma

[BDforever]

Malaysia is waiting for a response from the government of Bangladesh over a $ 2.3 billion loan proposal to build the Padma bridge, says a Malaysian prime minister’s special envoy.

“Both Malaysia and Bangladesh have agreed to the terms set by the Bangladesh Bridge Authority and now we are waiting for a formal response,” Malaysian prime minister’s Special Envoy to India and South Asia Datuk Seri S Samy Vellu conveyed the offer at a press conference at Ruposhi Bangla Hotel in the city on Friday.

Responding to a question that the government of Bangladesh has decided to build the bridge by internal resources, he said, “If it is then we are finished.”

He said the finance minister of Bangladesh has nothing to do with the project, the largest ever infrastructure project in Bangladesh.

Malaysian High Commissioner in Dhaka Norlin Binti Othman and senior officials of the high commission were also present.

“We entered into the project to assist Bangladesh government to complete the bridge which will provide a permanent connection between the two parts of the country,” Samy Vellu said at the crowded press conference, UNB adds.

He said the main reason why Malaysia has shown interest in the project is to help Bangladesh progress and it will ensure better housing for people of Bangladesh, apart from establishing shipping connection and new township.

The special envoy said the initiative will help strengthen cooperation between the two Muslims countries.

The Malaysian government, he said, is now hoping for the Bangladesh government to make its decision soon to enable both countries to execute a government-to-government memorandum of agreement.

Earlier on February 20-21, discussions were held in Dhaka, and later both sides jointly signed the minutes of the terms that were agreed upon.

Prime Minister Datuk Seri Najib Tun Razak has also expressed Malaysia’s desire and total commitment to implement the project in an official letter to the Prime Minister of Bangladesh, Sheikh Hasina, early this year.

Both Malaysia and Bangladesh signed a government-to-government memorandum of understanding (MoU) on April 10 last year for Malaysia to form a Consortium to implement the project.

Meanwhile, it is understood that a Malaysian consortium led by Tan Sri Halim Saad of Markmore Group will be implementing the project.

The Padma bridge is a 6.15 kilometre multipurpose road-rail bridge across the PadmaRiver, which on completion will be the largest bridge in Bangladesh and the first fixed river crossing for road traffic.

The bridge will connect Louhajang in Munshiganj to Shariatpur and Madaripur, linking the south-west of the country with its northern and eastern regions.

The project is to be undertaken on a Build-Operate-Own-Transfer (BOOT) mode through a privatised concept.
source: Malaysia ready to fund Padma bridge: Envoy | The Daily Star

 

[eastwatch]

I could not thank this news because the interest rate is too high and other terms and conditions are against the long-term interest of Bangladesh. AL ministers and sisters steel the project money and the common people of Bangladesh suffer as a result. The GoB should wait until the next general election is over. Let the next govt decide on the new source of funding. Before that the new govt should also find out the mastermind behind the WB fund scandal.

 

[CaPtAiN_pLaNeT]

Malaysia offers $2.3bn fund to bridge Padma

Malaysia offers $2.3bn fund to bridge Padma - bdnews24.com

Senior Correspondent, bdnews24.com

Published: 2013-03-15 11:47:46.0 Updated: 2013-03-15 12:42:42.0
Malaysia on Friday formally offered to invest $2.3 billion to build the $2.9 billion Padma bridge embroiled in controversy.

ACC finds graft proof in Padma project

Malaysian Prime Minister’s Special Envoy to India and South Asia S Samy Vellu disclosed the offer at a press conference in Dhaka.

He said they had submitted the proposal to the Prime Minister earlier this year and were awaiting her green light.

Samy Vellu said his country would complete the mega-project in four years if the Bangladesh government agreed to the proposal.

The investment offer for the 6.15-kilometer multipurpose road-rail bridge, the largest ever infrastructure in Bangladesh, came at a time when the government is poised to build it on its own.

The envoy said they would take back the total return in 26 years on the toll collected from the bridge that would connect 19 south and southern districts with Dhaka and the eastern region and is expected to increase the GDP by 1.2 percent.

The toll charge will be fixed by the Bangladesh government, he said, according to the jointly signed minutes of the terms that were agreed upon during a discussion in Feb in Dhaka.

He said in the first five years they would not share the revenue and would take 70 percent of the net revenue in the next 21 years.

The Malaysian envoy said his country agreed to pay tax to Bangladesh on the net profit as per the local rules.

Based on their estimation he said, the net revenue collected would be $7.4 billion, of which they would get an estimated $5.2 billion.

The envoy said they entered into the project to assist Bangladesh government to complete the bridge.

“It is to help Bangladesh progress,” he said and added that it will ensure better housing for people of Bangladesh, apart from establishing shipping connection and new township.

The special envoy said the initiative will help strengthen cooperation between the two Muslims countries.

The Malaysian government, he said, was now hoping for the Bangladesh government to make its decision shortly to enable both countries to execute a government-to-government memorandum of agreement.

Early this year, Malaysian Prime Minister Najib Tun Razak had also expressed Malaysia's desire and commitment to implement the project in an official letter to Sheikh Hasina.

Both Malaysia and Bangladesh signed a government-to-government memorandum of understanding (MoU) on April 10 last year for Malaysia to form a consortium to implement the project.

Meanwhile, Finance Minister Abul Maal Abdul Muhith announced that they would build the bridge on their own after it withrew the request for the World Bank’s pledged $1.2 billion credit following more than a year of impasse over suspected corruption charges.

The minister in Parliament on Mar 5 said that the government would soon make public the schedule and yearly estimation for implementation of the project.

He also announced that the India’s $200 million grants under the $1billion line of credit would be injected to their ‘self-funded’ project.

“Such financing could also come from Malaysia in future,” he had told Parliament apparently to keep the doors open for foreign support.

Replying to a question, the Malaysian envoy on Friday said they have no problem if the government went ahead on its own.

“It (the project progress) will be finished here then,” he said.

In the latest plan, the government estimated the overall cost of the mega project at over Tk 220 billion.

Though the government is seriously thinking of alternatives to the World Bank funding to build the dream bridge, it is yet to make public its funding plans.

 

[BDforever]

I could not thank this news because the interest rate is too high and other terms and conditions are against the long-term interest of Bangladesh. AL ministers and sisters steel the project money and the common people of Bangladesh suffer as a result. The GoB should wait until the next general election is over. Let the next govt decide on the new source of funding. Before that the new govt should also find out the mastermind behind the WB fund scandal.

they are giving interest off for 26 years

 

[eastwatch]

they are giving interest off for 26 years

Thanks. However, if you read the bdnews24.com news, it says Malaysia will invest $2.3b and will take away $5.2b during the next 26 yrs. So, Malaysia will take (5.2b - 2.3b) x 1000m/26yrs = about $111.5million per year. You can count this money as interest payment. So, the interest rate becomes a constant 4.8% per year.

I think, the big interest rate is what BD is not willing to accept. Can you or someone hilite the interest rate of the WB offer?

 

[mehboobkz]

Based on their estimation he said, the net revenue collected would be $7.4 billion, of which they would get an estimated $5.2 billion.

Who is "they" but Malaysian.
Or not?

Thanks. However, if you read the bdnews24.com news, it says Malaysia will invest $2.3b and will take away $5.2b during the next 26 yrs. So, Malaysia will take (5.2b - 2.3b) x 1000m/26yrs = about $111.5million per year. You can count this money as interest payment. So, the interest rate becomes a constant 4.8% per year.

I think, the big interest rate is what BD is not willing to accept. Can you or someone hilite the interest rate of the WB offer?

WB/IMF soft loan Interest hovers around 2 to 3 percent.

 

[BDforever]

Thanks. However, if you read the bdnews24.com news, it says Malaysia will invest $2.3b and will take away $5.2b during the next 26 yrs. So, Malaysia will take (5.2b - 2.3b) x 1000m/26yrs = about $111.5million per year. You can count this money as interest payment. So, the interest rate becomes a constant 4.8% per year.

I think, the big interest rate is what BD is not willing to accept. Can you or someone hilite the interest rate of the WB offer?

china also offered to bangladesh, but AL will not do anything for india

 

[Sam1980]

That is too much profit for a country that claims to follow principles of Islamic banking!

 

[the just]

I could not thank this news because the interest rate is too high and other terms and conditions are against the long-term interest of Bangladesh. AL ministers and sisters steel the project money and the common people of Bangladesh suffer as a result. The GoB should wait until the next general election is over. Let the next govt decide on the new source of funding. Before that the new govt should also find out the mastermind behind the WB fund scandal.

Dear sir,I can not disagree with you more.in my book nai mamar Che kana mama bhalo. I am from Khulna.I grew up there.this bridge is not only a dream its lively hood for millions of ppl.Padma bridge is a infrastructure master plan from early 60s.it high time this bridge see the light of day.regardless Al/BNP this is a national priority.in next 26 years anything can happen.we will lose some money granted but think about how much we will gain?mongla port will be another successful port which will attract more foreign currencies. Transport system will be way better and less costly .it will only take 5 hours to come to Dhaka.the food supply will increase price will be cheaper in Dhaka.just think about the patrol it will save.

 

[Zabaniyah]

Thanks. However, if you read the bdnews24.com news, it says Malaysia will invest $2.3b and will take away $5.2b during the next 26 yrs. So, Malaysia will take (5.2b - 2.3b) x 1000m/26yrs = about $111.5million per year. You can count this money as interest payment. So, the interest rate becomes a constant 4.8% per year.

I think, the big interest rate is what BD is not willing to accept. Can you or someone hilite the interest rate of the WB offer?

Hmm....projects that run on BOOT basis enable the contractor to operate and own it for long periods of time. The fees are also likely to be pretty high. I don't know, there are still some unanswered questions on this.

In another news, IMF is to review Padma's financing:

IMF to review new Padma financing

The International Monetary Fund will review whether the government’s new financing arrangement for constructing Padma bridge will have any negative impact on the country’s fiscal, external and debt sustainability.

The Washington-based lender is also discouraging the government from setting up nuclear power plants with credit from Russia at high interest rates.

In its country report on Extended Credit Facility (ECF) loans on March 11, the IMF clarified its position on these two major issues.

An IMF team will visit Dhaka on March 20 to discuss issues related to the bridge project with the government, said finance ministry officials.

Referring to Bangladesh government’s move to have a new financing framework for the bridge project, the IMF said more information on new financing modalities on the project would be needed to assess its full impact on the country’s fiscal, external and debt sustainability.

The ECF loan is tagged with a major condition that restricts Bangladesh government’s hard-term borrowing from external sources.

When the ECF loan programme was launched in April last year, the IMF fixed the limit for Bangladesh for hard-term borrowing at $1 billion a year.

But the IMF raised the ceiling to $1.5 billion a year on request from Bangladesh government that was under pressure from different sectors to go for further borrowing.

A finance ministry official said the IMF would closely watch whether external borrowing for financing the Padma bridge project crosses the limit for hard-term borrowing.

About one and a half months have elapsed since the government withdrew its request to the WB for $1.2 billion funding, but the government is yet to finalise financing arrangement to implement the project, one of the ruling party’s key election pledges.

Finance Minister AMA Muhith told reporters last week that the financing arrangement would be finalised in the next 20 days.

Officials said the communications ministry is trying to persuade the government high-ups to accept the costly Malaysian financing proposal for building the bridge, despite the finance ministry’s strong reservations about the proposal.

The report said, “The authorities [Bangladesh government] will formulate alternative financing arrangements including with other development partners while ensuring that the near-term resource needs for the construction of the bridge fall within the quantitative performance criteria and indicative targets.”

It said the IMF conditions for hard-term borrowing were not followed in the loan contracts involving $1.5 billion with Russia for nuclear power plants and defence purchases.

The construction of two 1,000-megawatt nuclear reactors between fiscal years 2017 and 2021 will require further non-concessional borrowing of $6 billion, said the report.

“The introduction of nuclear power would create health, safety, and environmental challenges especially given the high population density in Bangladesh, which are likely to require ample investment in technical expertise and regulatory capacity.

“Feasibility studies are needed to ascertain such costs to ensure that sufficient fiscal resources are set aside for proper risk mitigation,” the report said.

In this context, the IMF encouraged Bangladesh to continue to pursue a full range of alternatives in developing the power sector and evaluate the potential investment in nuclear power in the context of least-cost options for generating electricity.

The lender also encouraged Bangladesh to “establish fiscal contingencies to ensure adequate safeguards are in place, in the event the government proceeds with constructing the new reactors”.

However, the report, on a positive note, acknowledged that the nuclear power plants would expand electricity supply — a major growth constraint in Bangladesh, and possibly increase growth over the long run.

Source: IMF to review new Padma financing | The Daily Star

Interestingly, the IMF are discouraging the government on the loan from Russia.

 

[idune]

Malaysian proposal for Padma Bridge – disaster waiting to happen

Since corruption evidence came to light on nationally important Padma bridge project, Awami League regime had jumped on questionable funding source paddled by even more corrupt person. It is important to know that now inflated $2.9 billion project is estimated to include additional 1.2% of GDP growth. That is how much this project is important to national economy and south western region of Bangladesh.

Samy vellu an indian origin Malaysian has his own track record of corruption, is pushing Padma bridge proposal now dubbed as “Malaysian proposal”. This so called “Malaysian proposal” has following outrageous terms that will enslave Bangladeshis for half a century to service Awami League and Samy vellu joint venture of wholesale looting.

1) Malaysia wants to own, operate and collect toll from Padma bridge for 50 years.
2) Malaysia wants each truck to pay US$16 toll and double the toll to $32 by 2030.
3) Malaysia wants car toll be $10 dollar and increases gradually.
4) Malaysia wants bus toll be around $20 increase gradually.

5) Malaysia wants guarantee of subsidy in the event of lower-than-expected earnings (below quarterly forecasted traffic flow for 25 years).
6) Malaysia wants duty-free import of construction materials.
7) Malaysia wants tax holiday.
8) Malaysia wants immunity from laws concerned with environmental and human rights issues.

9) Bangladesh liability could reach a maximum of $11.9 billion as the consortium would borrow at three per cent interest rate from the international money market for the bridge.
10) Bangladesh cannot build any other bridge over Padma river.

Each truck to pay $16 as toll to cross Padma Bridge initially

Shakhawat Hossain

Each truck will have to pay US$16 as toll to cross the proposed Padma Bridge in the initial years and almost double in 2030 as per condition of a Malaysian consortium willing to take up the mega infrastructure project.

The consortium which submitted an initial proposal last February projected that the toll for a car will be $10 dollar and a bus around $20 in the initial years.
The toll rates which will be increased gradually over the next fifty years have been calculated on the basis of joint study by AECOM, a consultant for the Padma Bridge project, and the

Each truck to pay $16 as toll to cross Padma Bridge initially

Dhaka, KL sign MoU on Padma Bridge

The consortium wanted the right to collect toll for 50 years.
It wanted a guarantee of subsidy in the event of lower-than-expected earnings, quarterly forecast on traffic flow for 25 years, duty-free import of construction materials, tax holiday and immunity from laws concerned with environmental and human rights issues.

Experts fear the arrangement might prove costly requiring Bangladesh to shoulder a debt liability of $10 billion for half a century.
They said the liability could reach a maximum of $11.9 billion as the consortium would borrow at three per cent interest rate from the international money market for the bridge.

Dhaka, KL sign MoU on Padma Bridge

 

[Skallagrim]

BALer bridge!

 

[PlanetSoldier]

Who is "they" but Malaysian.
Or not?



WB/IMF soft loan Interest hovers around 2 to 3 percent.

So far I remember WB Padma bridge loan interest was within .5 to 1%

 

[PlanetSoldier]

BALer bridge!

BALer circus actually...one after one hijacking of clueless peoples' attention. To my view BAL has to give reasonable answers on the WB issue to the nation before proceeding anymore on it. People have to think the country doesn't belong to a party rather it's theirs.

 

[Skallagrim]

BALer circus actually...one after one hijacking of clueless peoples' attention. To my view BAL has to give reasonable answers on the WB issue to the nation before proceeding anymore on it. People have to think the country doesn't belong to a party rather it's theirs.

I can't stand this topic any more!