The Asian Development Bank (ADB) and the Japan International Cooperation Agency (JICA) have extended the deadline for putting into effect their respective loan agreements with the government to early 2012, on constructing the Padma Bridge.
The extension of the deadline came as a sequel to the suspension of its pledged funding worth US$ 1.2 billion by the World Bank (WB) over corruption charges, official sources said.
The loan agreement of ADB was supposed to be effective from September 6 last, which has been deferred until January, 27, 2012. The similar agreement with JICA was supposed to be effective on September 18 last. The deadline for effectiveness has been extended now to February, 2012, a senior official in the Ministry of Finance (MoF) said Monday.
The decision to revise the deadlines came recently from both the financing institutions, the official added.
The US$ 2.9 billion Padma Multipurpose Bridge project has mainly been financed by the World Bank with its $1.2 billion commitment. The ADB has committed to provide $615 million, JICA $420 million and Islamic Development Bank (IDB) $140 million.
The WB has suspended its pledged funding worth US$ 1.2 billion for Padma Bridge amid allegations of corruption in the bidding process of the country’s longest multipurpose bridge, Finance Minister AMA Muhith told the media on October 8.
Ellen Goldstein, Country Director, World Bank Bangladesh, last week said they will not proceed with effecting the loan agreement on Padma Bridge until they are fully satisfied with the fraud and corruption` issues’ in the tendering process of the country’s longest bridge.
“Padma is now an uncertain project as WB, ADB and JICA – all the three major financiers are now hyper-active upon getting the smell of corruption. Things have worsened after the WB suspended their promised fund for allegations of corruption,” a top bureaucrat, preferred not to be named, told the FE.
He said there is still a thin chance of getting credit from all the three financing institutions if the government proceeds with its probe into allegations of corruption in the bidding process of the Padma Bridge.
However, a high-official in the Economic Relations Division (ERD) under the MoF said the deadlines for making the loan agreements effective by ADB and JICA was extended in last July as finalisation of tendering process for Padma Bridge was taking more than the expected time.
“The putting into effect of loan agreements was extended until next February by both ADB and JICA due to the lengthy process of tendering, not for corruption allegations,” a Joint Secretary at ERD told the FE on Monday.
He, however, said both ADB and JICA now smell corruption in the project after a rigid stance taken by the WB on the particular fraud charges. He said implementing Padma Bridge project under the prevailing situation has become a bit uncertain, but not absurd.
Islamic Development Bank (IDB), one of the four financiers of the Padma Bridge, has already released US$ 140 million for the construction of an approach road of the $2.9 billion project.