Padma Bridge
The Finance Division has agreed in principle to start the construction work on the Padma Multipurpose Bridge through Retroactive Financing.
However, the division in a letter on Sunday to Economic Relations Division (ERD) said the retroactive financing would be effective only for the World Bank.
Under the retroactive financing, the government would start the initial construction of the Padma Multipurpose Bridge from its own resources, apparently to complete the work during its tenure.
The amount would later be adjusted as soon as Bretton Woods Institution releases the fund after an agreement is finalised with the World Bank.
The finance division, however, declined to receive the 10-20 percent fund from the World Bank in the first phase under the system. Rather, it recommended taking 5 percent of the pledged fund. The World Bank promised to provide US$ 120 crore through IDA in first phase.
The government and the World Bank at a recent meeting took the decision following a proposal of the Bridge Division, a senior ERD official said.
According to the decision, the government would spend US$ 120 million to US$ 140 million through retroactive financing that would be balanced after signing agreement with the IDA.
Sources said the World Bank, coordinator of the donor agencies, proposed that Bangladesh govern-ment spend 10 percent to 20 percent of the total fund through retroactive financing for emergency preparatory work of the bridge.
About Re-lending of Loan and Credit to Bangladesh Bridge Authority (BBA), the bank proposed that the full portion of the government financing would be provided to BBA as grants.
Besides, the total fund to be provided by the World Bank would also be handed over to the BBA under same terms and conditions. The BBA would bear the risk of currency exchange rate, sources said.
The wrap-up meeting of the World Bank Pre-Appraisal Mission held on October 31 this year decided to resolve the issues of retroactive financing and re-lending of loan and credit to BBA with finance division.
The meeting chaired by ERD Secretary M Musharraf Hossain Bhuiyan also discussed issues, including conditions, regarding WB’s US$ 1,500 million loan.
Earlier, the World Bank conducted the Pre-Appraisal Mission on Padma Multipur-pose Bridge on October 17-31.
ERD Secretary M Musharraf Hossain Bhuiyan said: “We made the proposal of applying the retroactive financing considering urgency of the Padma Multi-purpose Bridge project.”
Besides World Bank, Asian Development Bank, JAICA and Islami Development Bank will finance Bangladesh for the construction of the Padma Bridge.
The government in Annual Development Programme of fiscal 2011-11 allocated Tk 12.08 billion for the construction of the bridge. Of the total, Tk 3 billion would be financed from the national exchequer while Tk 9.08 billion from project assistance (PA).
Mazharul Anwar Shipu
daily-sun

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