PADMA BRIDGE CREDIT
The government has completed negotiations with the World Bank for its funding worth $1.2 billion (Tk 85 billion) for the Padma bridge.
A delegation of the bank arrived on Jan 6 for negotiations with its Bangladesh counterpart led by ERD additional secretary Arastoo Khan.
The bank is all set to begin disbursement after the project is approved by its board next month, an Economic Relations Division (ERD) official said Sunday.
“The negotiation on additional $300 million committed by the World Bank will be discussed later,” said the official.
The loan comes with a grace period of 10 years and after that it will have to be repaid over 30 years with an interest of 0.75 percent.
The other major lenders who have already committed to contribute to the $2.9 billion Padma Multipurpose Bridge include the Asian Development Bank ($615 million), Islamic Development Bank ($140 million) and Japan development agency JICA ($400 million). Bangladesh will provide $600 million from its own resources.
The 6.15-kilometre bridge project, expected to be completed by 2013, is a top government priority.
The main construction work of the bridge, the largest project ever undertaken in Bangladesh, is likely to begin in the next fiscal year. Other related works like land acquisition are already underway, the official said.
“Under the retroactive financing, the government can spend about $60 million on the project before the loan agreement is signed, which will later be adjusted 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 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 economic growth by 1.2 percent, while it will be 2.3 percent in the south-western region.
The bridge will help reduce the economic disparity between the impoverished south-western regions and better developed central parts of the country.