Stage set for Padma funding talks

The government will enter into negotiations with the World Bank to get a $1.2 billion credit to bankroll the coveted Padma bridge project.

A World Bank negotiation team will arrive in Dhaka on Thursday and hold meetings with officials of Economic Relations Division, communications ministry and Bridge Division.

The government attaches top most priority to the 6.15-kilometre Padma bridge project, the country’s largest ever project, eying to finish the construction work by 2013.

“We expect to conclude the final negotiation by Saturday and the WB Board will give its final approval in its February meeting,” said an ERD official wishing anonymity.

The main construction work on the $2.9-billion bridge is likely to begin in the next fiscal year but other works like land requisition are going on in full swing, the official said.

“Under the retroactive financing, the government is able to spend about $60 million on the project before the loan agreement is signed and it will later adjust it with the loan,” he said.

Retroactive financing is a payment made by a borrower for a project out of its own resources before the credit agreement is signed.

The multilateral lending agency also committed to providing additional financing to the tune of $300 million as the project cost has gone up for bringing changes in its design.

“We’ll negotiate with the World Bank for additional $300 million during the project period,” the official said.

The Asian Development Bank and the Islamic Development Bank also committed $615 million and $140 million respectively for the proposed bridge.

Japan, the country’s largest bilateral donor, has also pledged to lend out $400 million for the bridge project.

The World Bank credit is a concessional loan at 0.75 per cent interest rate which will have 40 years maturity, with a 10-year grace period.

The government has already floated international tender for pre-qualification of contractors to build the proposed road-cum-rail bridge.

According to a World Bank assessment report, the proposed bridge is expected to boost the country’s growth by 1.2 percent and while 2.3 per cent in the southwestern region.

The bridge will help reduce the economic disparity between the impoverished southwestern region and better developed central Dhaka.

Sheikh Shahariar Zaman