Confusion over Padma bridge financing

Best bet still with World Bank
Amid much hype, much of it without taking into account the steep terms and conditions that would inevitably come with private venture funding should Bangladesh opt for a Malaysian solution, the question of who will ultimately fund the biggest infrastructure project of the present government remains elusive as ever. Indeed the matter loomed large in a recent cabinet meeting where the bulk of policymakers, it seems, were hooting for financing from Malaysia. Dissenting voices, albeit few in number included the finance minister who has come out in favour of working out differences with the World Bank (WB).

Given the fact that the project in question involves nearly $3 billion in financing, the major question is whether or not the country will be in a position to go for an agreement with Malaysia that will undoubtedly call for a long-term lease on the completed bridge for cost recovery and profit making. Secondly, whether going for this option will benefit connectivity if toll charges are fixed at a rate that will be so high that the carry over effect will drive ups costs of goods using the bridge will ultimately make it uneconomical to use it in the first place.

Though there have been some hiccups experienced in relations between the government and WB over alleged case of graft, the situation is not beyond salvation. It should be noted that there are several advantages to take WB financing where the interest rate would be a mere 1% and payment of instalments would only commence 10 years after completion of construction. These are terms that are agreeable to a developing nation like Bangladesh. As time is of the essence, it is imperative that measures be taken at policy level to get the ball in the right direction for a project of this magnitude will take years and not months to build, and once completed, will go a long way in facilitating trade and commerce links between the south and the rest of the country.


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