Padma Bridge: Govt to go for KL fund, says PM

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Saturday, April 7, 2012
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Padma Bridge
Padma Bridge: Govt to go for KL fund, says PM

http://www.thedailystar.net/newDesign/news-details.php?nid=229379

Hasan Jahid Tusher

The Padma bridge would be constructed with Malaysian funds but Bangladesh's relation with the World Bank would not be harmed, said Prime Minister Sheikh Hasina yesterday.

Hasina said this at a meeting of her party's highest decision making body, Awami League Central Working Committee, at Gono Bhaban last night.

Chairing the meeting, the prime minister said a Memorandum of Understanding would be signed with the Malaysian government regarding the bridge project, meeting sources told The Daily Star. Communications Minister Obaidul Quader would go to Kuala Lumpur today or tomorrow to sign the MoU. A special envoy of the Malaysian prime minister would be his counterpart.

The premier said she would be present during the MoU signing ceremony via teleconference with Malaysian Prime Minister Datuk Seri Najib Tun Razak.

Hasina said Bangladesh and Malaysia would benefit with the construction of the bridge. She also hinted that had the bridge been built with the World Bank funding, people would have had to pay excess toll.

It would be better if the bridge is constructed with Malaysian funds rather than the World Bank's, she said, assuring her party lawmaker Abdur Rahman that a second Padma bridge at Paturia would also be built.

The Malaysian cabinet recently approved the Padma bridge investment proposal. According to the proposal, a Malaysian consortium would be set up to undertake the $2.19 billion project.

In October last year, the World Bank suspended its funding for the mega construction project in connection with foul play in the bidding process. The other financiers of the project--Asian Development Bank, Japan International Cooperation Agency and Islamic Development Bank--also suspended release of their promised funds.

The government had signed loan agreements with World Bank for $1.2 billion, Asian Development Bank for $615 million, Japan International Cooperation Agency for $400 million and Islamic Development Bank for $140 million to construct the 6.15-kilometre bridge.

The World Bank last week temporarily banned a unit of the Canadian company SNC-Lavalin from taking part in any World Bank-funded project for its alleged involvement in corruption in the Padma bridge project.

Kuala Lumpur had proposed Dhaka about its wish to fund the project and a MoU was supposed to be signed in this regard.

Meanwhile, at the meeting last night, a few party leaders urged the prime minister to take immediate measurers to resolve water crisis in metropolitan cities.

Hasina directed party leaders to immediately complete holding councils of the party grassroots. If any designated leader failed to hold the councils, the party would form the committee from Dhaka, she said.

She also expressed dissatisfactions over comments made by Jubo League leaders against Awami League leaders and lawmaker on Thursday.

 

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Padma Bridge Project
Govt 'shifts' to Malaysia
Quader flies to KL tonight for signing MoU Tuesday
Staff CorrespondentA high-profile delegation headed by Communications Minister Obaidul Quader leaves for Kuala Lumpur tonight to sign a Memorandum of Understanding (MoU) on Tuesday on Malaysian funding for the $2.9 billion Padma Bridge project.

Economic Relations Division Secretary Iqbal Mahmud, Bridges Division Secretary Khandaker Anwarul Islam and project director Shafiqul Islam will accompany the minister.

"We are going there to sign an MoU. I myself or the ERD secretary may sign it," Quader told The Daily Star yesterday. He, however, declined to elaborate on the matter.

In April last year, the government signed an agreement with the World Bank for a $1.2 billion loan to construct the country's longest bridge. Asian Development Bank was to provide $615 million, Japan International Cooperation Agency $400 million and Islamic Development Bank $140 million for construction of the multipurpose bridge. But the project stalled in October when the WB alleged corruption in the bidding process.

In January, Malaysia formally proposed giving a $2.19 billion loan for the bridge. An MoU was supposed to be signed on February 21, but the move was cancelled for some technical reasons.

On Friday night, Prime Minister Sheikh Hasina said the Padma Bridge would be constructed with Malaysian fund and an MoU in this regard would be signed on April 10. She was speaking at a meeting of the Awami League Central Working Committee.

Her announcement came three days after the WB suspended a unit of Canadian company SNC-Lavalin from bidding in WB-funded projects. The unit, identified in a Canadian newspaper as the engineering firm's Bangladesh subsidiary, had bid for supervisory consultancy of the project, which involved $50 million.

Amid uncertainty over the mega project, Finance Minister AMA Muhith had said the agreement with the WB and the other donors would have to be withdrawn or cancelled before the government made another funding agreement. Senior officials were in talks with WB officials to resolve the impasse.

Sources in the communications ministry said the government might send a letter to the WB in a day or two, scrapping its loan agreement.

"It's not complicated to scrap an agreement. The government can do it if it does not want to take the WB loan and goes for other funding," a senior official said seeking anonymity.

Meanwhile, economists said the Malaysian offer would be costly for Bangladesh, as it would put tougher conditions for providing the fund.

They also said that if it were the World Bank, the government would repay the loan at 0.75 percent interest in 40 years. Moreover, Bangladesh would get a 10-year grace period for paying off the loan.

However, sources in the ministry's Bridges Division described the MoU signing as a major development, saying that this step would open up an opportunity for Bangladesh to get Malaysian funds for the Padma bridge project.

They said a draft of the MoU had been prepared, according to which the two countries agreed to cooperate in the bridge construction.

"After signing of the MoU, we will begin negotiations with Malaysia on some crucial issues like the total cost of constructing the bridge, the time Bangladesh will get to pay off the debt, construction period and toll to be fixed for different vehicles," a Bridges Division official said.

He added that the present government would try to settle all these issues as quickly as possible, so it could start the construction work before the expiry of its tenure. The deal with Malaysia will be finalised only if both the countries can reach an agreement.

 

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Is there any relation between the 2 following news:

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