FHM Humayan Kabir
The Ministry of Finance (MoF) has allocated Tk 4.50 billion for the fund-starved Bridge Division as ‘retroactive financing’ for the Padma Bridge project this fiscal (2011-12), officials said Tuesday.
The MoF also asked the Bridge Division to take steps so that US$2.24 billion loans committed by the donors can be made effective soon to avail all the credit line for the $2.9 billion mega project.
“The World Bank (WB) has already confirmed $60 million fund as retroactive financing. So, we have directed the Bridge Division to spend money within the limit,” a senior official told the FE.
Earlier, the Bangladesh Bridge Authority (BBA) under the Bridge Division sought Tk 5.0 billion funds from the MoF against its Tk 17.07 billion project aid (PA) outlay in the current development budget.
Since the $2.24 billion loans committed by three major donors — the WB, the Asian Development Bank(ADB) and Japan — have not been made effective so far, the BBA does not have adequate PA for the Padma Bridge project, an official said.
Another MoF official said as the Bridge Division has so far failed to sign ‘subsidiary loan agreements’ for the loans committed by the ADB and Japan, those loans have not been made effective.
The Bridge Division only signed a subsidiary loan agreement with the Washington-based WB, but this credit line is yet to be made effective. Before effectiveness of the committed credits, the lenders will not release any fund for the project.
The Islamic Development Bank (IDB) last week made effective its committed $140 million loans, to be utilised for constructing approach road and toll-plaza on one side of the proposed 6.15-km-long bridge.
Under the terms and conditions of the WB’s $1.20 billion loan, the BBA can spend funds up to $60 million from the government resources for the Padma Bridge project, which will be considered as retroactive financing.
Bridge Division Secretary Mosharrf Hossain Bhuiyan said as they are yet to receive any fund from the lenders for the multi-billion-dollar Padma Bridge project, they need the retroactive financing to continue its works.
For the Padma Bridge project, the government in the current fiscal’s development budget has allocated Tk 17.07 billion PA and Tk 4.79 billion from its own resources.
Advance money from the government against the WB-committed loan is imperative for the project due to inadequate fund for continuing its works, a senior BBA official said.
The World Bank has confirmed $1.2 billion credit for the project, the ADB $615 million, the Japan International Cooperation Agency (JICA) $420 million, and the IDB $140 million.
“We hope we will be able to make the foreign loans available by December this year. In the meantime, we need funds for some ongoing works of the project,” the BBA official said.
“We are hopeful of making the three donors’ loans effective within this year. We will not require additional funds from the government when those loans will be available,” he added.