QUOTING the Finance Minister AMA Muhith, the media reported that the World Bank (WB) is now rethinking on financing Padma Bridge project. It will indeed be worthy and it may usher our dream project of Padma Bridge which is lingering for years due to lack of prudence of the policy-makers. WB has recently announced the change in its policy regarding the funding of projects facing charges of corruption. Earlier in August, WB in its last Country Assistance Strategy Progress Report, said it would not cancel projects with alleged malpractices but would fight corruption by sticking to the project. All that hints is that funding in Padma Bridge by the World Bank is likely if the government can negotiate with the Bank efficiently which was earlier spoiled by the arrogance, mismanagement and hostile attitude shown by some government high ups.
We hope, the Finance Minister will be able to manage the Padma Fund in the ongoing World Bank Group-International Monetary Fund (IMF) Annual Meetings 2014 that commences today in Washington. It is no doubt in any estimate that WB interest rate was very low so far in contrast to other proposals. Besides, the government has tried to avail funds from Malaysia, China and other sources, but they have reportedly failed to manage any significant funding arrangement, or even through popular subscriptions from within the country.
The ECNEC on January 11, 2011 chaired by the Prime Minister Sheikh Hasina approved a plan with a cost of Tk 20,507 crore for Padma Bridge project. WB approved a $1.2 billion financing deal out of a total cost of $2.9 billion on February 24, 2011. It was supposed to provide $1.2 billion at an interest rate of 0.75 percent to be repaid in 40 years with a 10-year grace period. If the normal loan amortization schedule applied, the government would have had to pay $249 million in interest in 40 years.
However, the Washington-based global lender informed the Bangladesh government about some misdeeds during the tender process in April 2011. The Bank claimed some reliable allegations of financial irregularities regarding the tender process and alleged that ‘conspiracy for corruption’ occurred insisting on initiating prosecution against persons believed to have been involved.
We welcome the World Bank’s policy change and belief that any kind of corruption cannot justify depriving the people of benefitting from the project. We have to further mention that both sides took corruption allegations as a challenge. As the modus operandi of lending funds by WB is suitable for Bangladesh, we suggest the government to operate the project on build, operate and transfer (BOT) basis. We hope, WB will not have withdrawn from the building of the Padma Bridge for internal allegations of corruption. It was for the country concerned to deal with such allegations. WB could only raise them.
We hope, the Finance Minister will be able to manage the Padma Fund in the ongoing World Bank Group-International Monetary Fund (IMF) Annual Meetings 2014 that commences today in Washington. It is no doubt in any estimate that WB interest rate was very low so far in contrast to other proposals. Besides, the government has tried to avail funds from Malaysia, China and other sources, but they have reportedly failed to manage any significant funding arrangement, or even through popular subscriptions from within the country.
The ECNEC on January 11, 2011 chaired by the Prime Minister Sheikh Hasina approved a plan with a cost of Tk 20,507 crore for Padma Bridge project. WB approved a $1.2 billion financing deal out of a total cost of $2.9 billion on February 24, 2011. It was supposed to provide $1.2 billion at an interest rate of 0.75 percent to be repaid in 40 years with a 10-year grace period. If the normal loan amortization schedule applied, the government would have had to pay $249 million in interest in 40 years.
However, the Washington-based global lender informed the Bangladesh government about some misdeeds during the tender process in April 2011. The Bank claimed some reliable allegations of financial irregularities regarding the tender process and alleged that ‘conspiracy for corruption’ occurred insisting on initiating prosecution against persons believed to have been involved.
We welcome the World Bank’s policy change and belief that any kind of corruption cannot justify depriving the people of benefitting from the project. We have to further mention that both sides took corruption allegations as a challenge. As the modus operandi of lending funds by WB is suitable for Bangladesh, we suggest the government to operate the project on build, operate and transfer (BOT) basis. We hope, WB will not have withdrawn from the building of the Padma Bridge for internal allegations of corruption. It was for the country concerned to deal with such allegations. WB could only raise them.
