Just a Dream?

Written by Ekram Kabir  •  Region  •  May 2013 PDF Print E-mail

As Bangladesh faces challenges to construct the Padma Bridge, will it agree to the World Bank’s conditions or will the bridge exist only as a blueprint?

The Bangladeshi authorities term the Padma bridge project, the ‘dream of the nation.’ The country’s longest bridge, expected to stretch 6.15km long, would connect the south-western parts of the country with Dhaka and save hundreds of thousands of working hours and transport costs. Apart from offering such facilities, the Padma Bridge is also expected to change Bangladesh’s south-western economic landscape  to boost the national economy.

At present, the entire region is heavily dependent on ferry services that connect it with the capital. According to the World Bank, the bridge would save travel time of up to two hours for buses and cars and more than 10 hours for goods trucks. Moreover, the inclusion of a railway track and provision for telecommunications, electricity and natural gas transmission would yield added advantages for the economy.

The Padma Bridge would also raise the economic and geographic prominence of the Mongla Port, which presently operates at a fraction of its real capacity.

The construction work of the bridge at Mawa-Jajira point was expected to begin by 2012 at a cost of nearly $3 billion. The project was funded largely by the Asian Development Bank (US$615mn), the World Bank ($1.5bn), Japan International Cooperation Agency ($415mn) and the Islamic Development Bank ($140mn). Of the total amount, Dhaka was to provide 50 million taka. However, when everything seemed to be going as planned, the corruption scandal jeopardized the funding and the project’s future.

The World Bank’s Integrity office provided the Bangladesh government with a report on 21 September 2011 alleging that SAHCO, a company named for and connected to the then communications minister, Syed Abul Hossain, sought to persuade companies to secure the main bridge contract. The report contains allegations by eleven confidential witnesses against his company. Hossain, however, denies any conflict of interest in the participation of SAHCO. In February last year, the Anti-Corruption Commission (ACC) completed its own investigation into the allegations and concluded that there had been no malpractices.

Meanwhile, the country’s anti corruption division raided Canada-based SNC-Lavalin’s offices in September 2011. In April 2012, authorities charged two SNC-Lavalin executives for attempting to bribe Bangladeshi officials in their bid to secure a consultancy contract for the Padma Bridge project.

Even though, the WB submitted a report on these allegations to the Bangladeshi government in April 2012, the ACC investigation into these allegations is still continuing.

However, the WB has temporarily halted the funding process. As investigations were underway, the Bank transformed the project into a conditional deal. It demands that all public officials suspected of corruption be put on leave immediately, a special investigations team within the ACC be appointed to investigate the allegations, a WB panel be allowed to have full access to the investigation and financiers be provided with greater oversight of the project procurement process.

Bangladesh agreed and the investigations began. However, it did not suspend the alleged officials nor provide the WB panel with access to the ACC investigation. After months of negotiations, the WB decided to cancel the loan for the Padma Bridge project. Following this, the Bangladesh government promptly defended the cancellation of the project by raising Bangladeshi nationalism. The government assured it could not let a foreign entity dictate its decision making. Some also suggested that the WB cancelled the loan because of the Grameen Bank’s involvement and to prevent the International War Crimes Tribunals from moving forward.

Following the cancellation of the project, in April, Bangladesh signed a MoU with Kuala Lumpur, according to which Malaysian banks and construction companies would finance and construct the bridge. According to the proposal, Bangladesh would repay the loan at an interest rate of 6.5 percent in 12 years, introducing stricter terms than those specified by the WB. Once the bridge became operational, the tolls would remain high as the Malaysian government would continue to share the toll revenues for another fifteen years.

Although Dhaka may have assumed a strong anti-World Bank position, it soon realized that it could not complete the project without the World Bank’s support. The government has sought to address the remaining WB concerns, hoping to move the project forward. Hossain resigned from the cabinet in July and the Secretary of the Padma Bridge, Mosharraf Hossain was sent on leave. The Prime Minister’s Economic Advisor Moshiur Rahman, who was the Integrity Advisor for the project, is also expected to leave office. Discussions and debates over the Padma Bridge don’t seem to end here. The WB has banned SNC-Lavalin from having any involvement in the project; while the Canadian court has accepted SNC-Lavalin’s case. The court may reveal the name of the people allegedly involved in the scandal once the trial begins.  However, it seems that Bangladesh’s ordeal to construct the bridge would be under the shadows of SNC-Lavalin’s corruption scandals.

All is not lost for Bangladesh yet. The Japan International Corporation Agency (JICA) is willing to initiate talks on financing the bridge if Bangladesh comes up with a fresh project framework. Furthermore, Dhaka would be floating an international tender for constructing the Padma Bridge at the end of June this year.

After discussions, debates as well as criticism, Bangladesh now seems to be on the right track towards constructing the Padma Bridge, with Dhaka mulling over ways to meet the World Bank’s terms and conditions. 

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