Gazi Towhid Ahmed
The state-run Investment Corporation of Bangladesh (ICB) has proposed the government to change the Padma bridge project into a public limited company.
The proposal was sent to finance ministry on May 2.
ICB Managing Director Fayekuzzaman said, “The proposal was on how to raise fund from national and international investors to implement the mega project. We have suggested debt equity.”
A high debt equity ratio generally means that a company has been aggressive in financing its growth with loans.
The proposal suggested a 60:40 credit ratio.
This means, 60 percent fund was suggested to be collected from the government’s long-term loan and from different projects like development budget, Infrastructure Finance Fund, Bangabandhu Multipurpose Bridge project and share sales of state-owned companies.
ICB recommended taking long-term loan from the Asian Development Bank (ADB), Japan International Cooperation Agency and Islamic Development Bank as, what its MD said, a huge amount of foreign currency would be needed.
According to the proposal, state-owned banks, non-bank financial institutions, Bangladesh fund and general investors would finance the remaining 40 percent of the project cost which will be its paid up capital.
The proposal also suggests the Padma bridge project be listed in the bourse. Its shares would be more attractive since a professional and efficient board would operate the company, said Fayekuzzaman.
The ICB MD said the cost of the bridge construction would decline as the board would try to give the major share of revenue to the investors.
On June 29, the World Bank cancelled its $ 1.2 billion credit for the Padma bridge project claiming to have proof of corruption conspiracy involving a Bangladeshi minister, some government officials, individuals and executives of a Canadian firm.
ADB, another major funding partner of the project, later also decided to follow the World Bank’s footsteps. The decision to cancel the credit has plunged the project into uncertainty.