The government has requested the Asian Development Bank (ADB) to enhance its loan commitment to the country’s largest Padma bridge due to the growing cost of the project, officials said Tuesday.
Finance ministry officials said the government sought higher financial support from the Manila-based lender that earlier assured US$615 million loan during talks with an ADB mission in Dhaka.
“The Padma bridge project cost can be swelled further as there is a trend of price escalation of construction materials. We have also taken the matter into consideration and has sought the increased fund,” a senior Economic Relations Division (ERD) official told the FE.
As the project cost has already been enhanced to US$2.40 billion, we have requested ADB to raise its financial support, he added.
The official said the finance ministry has also requested the ADB Vice-President Ursula Schaefer-Preuss, who visited Dhaka early this month, to enhance its loan amount.
Four major donors in an assessment in last quarter 2009 said cost of the Padma Bridge scheme could swell to $2.70 billion from existing $2.4 billion due to price escalation of building materials and interest payments during its implementation period.
Donors including World Bank, ADB, Japan and Islamic Development Bank have so far assured $2.25 billion loans for building the largest Padma bridge, which will connect impoverished south-western region with Dhaka.
The ERD official said as Abu Dhabi Fund of the United Arab Emirates (UAE) is yet to respond to the government’s request to confirm its pledged $40 million loans we are trying to remain on the safe side with adequate funds from different sources for the 6.15-kilometre Padma Bridge.
In the discussion, the ADB mission has asked government to enhance the vehicles’ tolls of the Jamuna Multipurpose bridge that will help fix higher tariff for the proposed Padma Bridge, he said.
“We are hopeful of receiving $100 million in additional credit from the ADB along with its earlier assured $715 million loan. The credit deal can be signed by December this year,” the ERD official said.
“As the government is going to borrow more than $2.25 billion from different donors, it will need to get financial return from the bridges to repay the foreign loans in time,” he said.